FinCEN BOI Reporting - More Info

Here are some of the ways your business can be exempt from filing this report. If you have any questions or need additional assistance, please reach out to us below.

Exempt Company List for FinCEN’s Beneficial Ownership Information Filing

The following types of companies do not need to submit beneficial ownership reports to FinCEN under the Corporate Transparency Act.
 

BOI report exemption for Large Operating Companies

An entity is exempt from reporting if it meets ALL THREE following criteria:

  1. It employs over 20 full-time workers in the United States, as defined in specific sections of the Internal Revenue Code (26 CFR 54.4980H-1(a) and 54.4980H-3).
  2. It filed a U.S. Federal income tax or information return for the last year showing over $5 million in gross receipts or sales. This amount is the total reported as gross receipts or sales on the entity’s IRS Form 1120, consolidated IRS Form 1120, IRS Form 1120-S, IRS Form 1065, or a similar form, after subtracting returns and allowances, and only includes income from U.S. sources based on Federal tax rules. For entities that are part of a larger group of companies filing a consolidated tax return, the $5 million threshold applies to the total reported for the entire group.
  3. It operates from a physical office within the United States.
 

BOI report exemption for an Inactive Company

An entity is exempt from reporting if it meets ALL of the following SIX conditions:

  1. It was established on or before January 1, 2020.
  2. It is not currently active in any business.
  3. It is entirely owned domestically, with no foreign individuals or entities holding any direct or indirect ownership.
  4. It has had no changes in ownership in the last twelve months.
  5. It has neither sent nor received more than $1,000, either directly or through any associated financial accounts, in the last twelve months.
  6. It does not own any assets, whether in the U.S. or overseas, including any stakes in corporations, limited liability companies, or similar entities.
 

BOI report exemption for companies owned by exempt companies (wholly owned subsidiaries)

An entity qualifies for an exemption if it is completely controlled and owned (100% ownership) either directly or indirectly by organizations that are already exempt under various other exemptions. However, this exemption does not apply to entities owned by money services businesses, pooled investment vehicles, entities assisting tax-exempt organizations, or inactive entities.
 

BOI report exemption for a tax-exempt company

This exempts an entity that meets ANY of the following conditions:

  1. It’s an organization that meets the criteria outlined in Section 501(c) of the Internal Revenue Code of 1986 and is tax-exempt under Section 501(a) of the same Code, without considering Section 508(a).
  2. It’s an organization that was previously described in Section 501(c) and was tax-exempt under Section 501(a) but has lost its tax-exempt status within the past 180 days.
  3. It’s a political organization defined by Section 527(e)(1) of the Code and is exempt from tax under Section 527(a).
  4. It’s a trust as specified in either paragraph (1) or (2) of Section 4947(a) of the Code.
 

BOI report exemption for registered accounting firms

Any public accounting firm is exempt from reporting if the firm is officially registered with the Public Company Accounting Oversight Board (PCAOB), as mandated by Section 102 of the Sarbanes-Oxley Act. This registration is necessary for the firm to legally audit public companies, and it subjects the firm to oversight and regulation to ensure the quality and reliability of its audits.
 

BOI report exemption for Securities Issuers

A securities reporting issuer refers to a company that issues stocks or bonds and must follow specific rules. Specifically, this includes companies that have their securities registered under Section 12 of the Securities Exchange Act of 1934 or those that need to regularly provide additional and periodic updates under Section 15(d) of the same act.
 

BOI report exemption for money services businesses

A money services business is exempt if it meets ANY of the following conditions:

  1. Operates as a money transmitting business and is registered with the Financial Crimes Enforcement Network (FinCEN) under 31 U.S.C. 5330. These businesses typically handle funds transfers, money orders, traveler’s checks, and similar activities.
  2. Is registered as a money services business with FinCEN under 31 CFR 1022.380. This includes a broader range of financial services such as currency dealing or exchange, check cashing, and issuing or selling prepaid access, in addition to money transmitting
 

BOI report exemption for securities brokers, dealers, exchanges, clearing agencies, or other Exchange Act registered entities

Exemptions are granted to securities broker, dealer, exchange, clearing agency and other Exchange Act registered entities that meet ANY of the following conditions:

  1. Meets the definitions of a broker or dealer as outlined in Section 3 of the Securities Exchange Act of 1934. Generally, a broker is someone who trades securities on behalf of clients, while a dealer trades securities on their own behalf.
  2. Is registered as such under Section 15 of the Securities Exchange Act of 1934, which requires these entities to register with the Securities and Exchange Commission (SEC) to legally conduct securities transactions.
  3. Fits the definitions of an “exchange” or “clearing agency” as specified in Section 3 of the Securities Exchange Act of 1934. An exchange is a marketplace where securities are traded, while a clearing agency is involved in the settlement of securities transactions.
  4. Is registered under either Section 6 or Section 17A of the Securities Exchange Act of 1934. Section 6 pertains to the registration of national securities exchanges, and Section 17A relates to the regulation of clearing agencies that help facilitate the clearance and settlement of securities transactions.
  5. Any other entity that is registered with the SEC within the Securities Exchange Act of 1934.
 

BOI report exemption for SEC-registered investment companies or investment advisers

Investment company or investment adviser meeting BOTH of the following conditions are exempt from reporting:

  1. Defined as an investment company under Section 3 of the Investment Company Act of 1940 (firms that pool funds from investors to collectively invest in securities and other financial assets) OR defined as an investment adviser under Section 202 of the Investment Advisers Act of 1940 (individuals or firms that provide advice about securities investments and are compensated for it).
  2. Registered with the Securities and Exchange Commission (SEC) under either the Investment Company Act of 1940 (for investment companies) or the Investment Advisers Act of 1940 (for investment advisers). Registration with the SEC is required for these entities to legally operate and offer their services.
 

BOI report exemption for SEC-registered venture capital fund advisers

Venture capital fund advisers or investment advisers meeting BOTH of the following conditions are exempt from reporting:

  1. Fits the description in Section 203(l) of the Investment Advisers Act of 1940. This section typically refers to advisers who solely advise venture capital funds, which are funds that invest in early-stage or emerging companies.
  2. Has completed and filed specific parts of Form ADV (Item 10, Schedule A, and Schedule B of Part 1A) or any successor forms, with the Securities and Exchange Commission (SEC). Form ADV is a detailed form used by investment advisers to register with the SEC and state securities authorities, and these specific sections include important information about the adviser’s business.
 

BOI report exemption for insurance companies

An insurance company is exempt if is meets the definition given in Sec. 2 of the Investment Company Act of 1940.
 

BOI report exemption for state-licensed insurance producers

A state-licensed insurance producer is exempt from reporting if they meet BOTH of the following conditions:

  1. Is an insurance producer (such as an agent or broker) officially authorized and regulated by a state’s insurance department, overseen by the insurance commissioner or a similar state official or agency.
  2. Maintains an operational physical office within the United States where it conducts its business.
 

BOI report exemption for banks, credit unions, or depository institution holding companies

This exempts any institution that qualifies as a bank under ANY of the following sections:

  1. Section 3 of the Federal Deposit Insurance Act, which generally includes institutions that accept deposits and make loans.
  2. Section 2(a) of the Investment Company Act of 1940, which includes entities engaged in the business of investing, reinvesting, owning, holding, or trading in securities.
  3. Section 202(a) of the Investment Advisers Act of 1940, which pertains to firms or individuals who are paid for advising others about securities investments.
  4. A Federal credit union or State credit union, as defined in Sec. 101 of the Federal Credit Union Act.
  5. A bank holding company as defined in Section 2 of the Bank Holding Company Act of 1956. These are companies that control one or more banks but do not necessarily engage in banking themselves.
  6. A savings and loan holding company as defined in Section 10(a) of the Home Owners’ Loan Act. These are companies that control one or more savings and loan associations, also known as thrifts or savings banks.
 

BOI report exemption for Commodity Exchange Act registered entities

A Commodity Exchange Act registered entity is exempt from reporting if they meet BOTH of the following conditions:

  1. They must be a “registered entity” as defined in Section 1a of the Commodity Exchange Act (entities like designated contract markets, derivatives clearing organizations, swap execution facilities, and others that are integral to the commodities and derivatives trading industry) OR one of the following, each as defined in Section 1a of the Commodity Exchange Act:
    • Futures Commission Merchant: firms or individuals that solicit or accept orders for the purchase or sale of futures contracts, options on futures, or swaps, and accept money or other assets from customers in connection with such orders.
    • Introducing Broker: individuals or firms that solicit or accept orders for futures contracts, options on futures, or swaps but do not accept money or other assets from customers to support such orders.
    • Swap Dealer: entities that engage in the business of buying or selling swaps.
    • Major Swap Participant: entities that are not swap dealers but maintain a substantial position in swaps for any major swap category.
    • Commodity Pool Operator: individuals or firms that operate or solicit funds for a commodity pool.
    • Commodity Trading Advisor: individuals or firms who provide advice on commodity futures, options, and the actual trading of managed futures accounts.
    • Retail Foreign Exchange Dealer: an entity acting, or offering to act, as counterparty to an off-exchange foreign currency transaction with a retail customer.
  2. Additionally, the entity must be registered with the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act. This registration is necessary for entities that participate in the trading, clearing, and reporting of derivatives and commodities transactions.
 

BOI report exemption for companies that have governmental authority

This exempts an entity that meets BOTH of the following conditions:

  1. Is created under the laws of the United States, an Indian tribe, a state, or a local government, or is formed through an agreement between two or more states.
  2. Acts with official governmental authority on behalf of the United States, an Indian tribe, a state, or a local government.
 

BOI report exemption for public utility companies

Public utilities are exempt from reporting if they are recognized as a regulated public utility according to 26 USC 7701(a)(33)(A). This part of the U.S. Tax Code defines regulated public utilities primarily as entities that furnish or sell services like electricity, gas, or water to the general public in a regulated environment. These entities are typically subject to significant governmental regulations to ensure the services are delivered safely, reliably, and at reasonable rates.
 

BOI report exemption for financial market utility companies

Financial market utility companies are exempt from reporting if they are specifically designated by the Financial Stability Oversight Council as a systemically important financial market utility under Section 804 of the Payment, Clearing, and Settlement Supervision Act of 2010. This designation is given to those utilities whose failure or disruption could create significant risk to the financial system due to their critical role in the marketplace.
 

BOI report exemption for pooled investment vehicles

A pooled investment vehicle entity is exempt from reporting if they meet BOTH of the following conditions:

  1. It is an investment company as defined in Section 3(a) of the Investment Company Act of 1940 (typically includes companies that pool funds from multiple investors to invest in securities and other financial assets) OR It would qualify as an investment company under the same section, except it is excluded by the provisions in paragraph (1) or (7) of Section 3(c) of the Act (exclusions generally apply to private funds like hedge funds and private equity funds). If the entity is excluded, it must be clearly identified by its legal name by the relevant investment adviser in its Form ADV (or a successor form) filed with the Securities and Exchange Commission. If it hasn’t been identified yet, it should be named in the next annual update of Form ADV that the investment adviser is required to file under rule 204-1 of the Investment Advisers Act of 1940.
  2. The entity is operated or advised by any of the following exempt entities: banks, credit unions, brokers or dealers in securities, investment companies or advisers, or venture capital fund advisers as defined in the other BOI exemptions for those entity types.
 

BOI report exemption for entities assisting tax-exempt entities

A entity that assists other tax-exempt entities is exempt from reporting if they meet ALL of the following conditions:

  1. Exclusively operates to provide financial support or hold governance rights over a tax-exempt entity (as described in exemption 19).
  2. Is based in the United States.
  3. Is owned or controlled entirely by U.S. persons, who are either citizens or legally admitted permanent residents.
  4. Receives the majority of its funding or revenue from U.S. persons who are citizens or lawfully admitted for permanent residence. This ensures that the assisting entity’s main financial support is domestically sourced from individuals with legal status in the United States.

Please note that the information shared here is for clarification purposes only and does not alter any legal obligations stipulated by statutes or regulations. For comprehensive details, please refer to the Beneficial Ownership Information Reporting Rule at fincen.gov/boi

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Do you have questions or need additional assistance with your BOI Reporting, please reach out. Thanks.