Introduction
With the Corporate Transparency Act (CTA) in effect, many U.S. businesses are now required to file a Beneficial Ownership Information (BOI) report with FinCEN. But not all entities have to comply. A common question is: Who is exempt from filing BOI?
Understanding these exemptions can save you time, effort, and legal trouble.
What Is BOI Filing?
BOI filing is a mandatory disclosure of a company’s beneficial owners to the Financial Crimes Enforcement Network (FinCEN). It aims to increase financial transparency and combat money laundering and terrorism financing.
Who Is Required to File?
Most small businesses such as:
- LLCs
- Corporations
- Other state-registered entities
are required to file unless they fall under specific exemption categories.
Who Is Exempt from Filing BOI?
There are 23 types of entities that are exempt from BOI reporting under the CTA. Here are the most common:
1. Large Operating Companies
To qualify, a company must:
- Have over 20 full-time U.S.-based employees
- Operate from a physical office in the U.S.
- Have filed U.S. federal income tax returns showing over $5 million in gross receipts
2. Publicly Traded Companies
Registered under the Securities Exchange Act of 1934
3. Tax-Exempt Entities
Including:
- 501(c)(3) nonprofits
- Political organizations
- Religious and charitable institutions
4. Banks and Credit Unions
Including:
- U.S. federally regulated banks
- Depository institution holding companies
5. Insurance Companies
Regulated under state law
6. Accounting Firms and Registered Investment Companies
7. Inactive Entities
These must meet all of the following:
- Formed before January 1, 2020
- Not engaged in business
- No foreign ownership
- No recent financial activity
- No assets
Important Note
Even if your company is exempt today, its status can change. Regularly reassess whether you meet exemption criteria—especially if ownership, operations, or income change.
Conclusion
So, who is exempt from filing BOI?
Entities like large operating companies, nonprofits, and banks typically qualify. However, most small businesses must file unless they meet strict exemption criteria.
