Beneficial ownership information (BOI) reporting & filing requirements

BOI encompasses details about individuals who directly or indirectly own or control a company. Identifying these owners is crucial to understanding who you are doing business with so decisions can be made with confidence and within risk tolerance.

BOI helps you establish trust with legitimate businesses and business owners; contributes to understanding risk exposure in relation to, for example, higher risk jurisdictions, sanctioned individuals, or politically exposed persons; and it can help reveal when an entity sits outside risk tolerance, so the relationship can be ended. BOI can also direct the level of monitoring required to limit risk and report issues efficiently.

Understanding beneficial ownership can make it harder for wrongdoers to hide behind or benefit from opaque ownership structures. Shell companies, for example, can be used to disguise illicit activities and the money generated from them. It can be difficult and time-consuming to identify patterns of shell company risk without access to BOI.

BOI is important to financial institutions as part of their basic due diligence processes and collecting the information is typically a regulator requirement. It’s important to governments who may be issuing export licenses or approving loans and grants or government contracts. And it’s important to businesses in all areas of commerce as part of their third-party risk management strategies. Without BOI it’s impossible to measure risk exposure, and therefore mitigate against it, and comply with laws on sanctions, terrorist financing, fraud, and money laundering.

Someone can exercise substantial control over a company in different ways, and there are different regional variations for the definition of substantial control, as well as beneficial ownership. Adding individuals with significant control is a newer concept in the US introduced as a requirement in the CTA. According to FinCEN, if an individual fits any of the following criteria, they could be deemed to be exercising substantial control:

• Someone who is a senior officer – the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function.
• Someone with the authority to appoint or remove certain officers or a majority of directors of the reporting company.
• Someone who is an important decision-maker within or for the reporting company.
• Someone with any other form of substantial control over the reporting company, such as someone with influence over important decisions.

Following FinCEN’s interim final rule issued in March 2025, only one type of reporting company falls within the BOI rules–Foreign reporting companies: Entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the U.S. by the filing of a document with a secretary of state or any similar office.

Under the CTA, authorized entities, including federal, state, local, and tribal officials, along with certain foreign officials, can access beneficial ownership information for national security, intelligence, and law enforcement purposes.

Financial institutions may also gain access under specific circumstances, with consent from reporting companies. However, access to this information isn’t a given; it’s not ubiquitous, even though other organizations and entities may benefit from accessing it for due diligence and risk management purposes.

Foreign entities, who are reporting companies, must file within 30 days of the interim rule's publication if they were registered before that date. Reporting companies registered to do business in the U.S. on or after the rule's publication have 30 calendar days to file an initial BOI report after they receive notice that their registration is effective.

Companies required to report their beneficial ownership information to FinCEN need to do so electronically through a secure filing system available via the FinCEN website. Information on beneficial owners includes names, dates of birth, addresses and identifying numbers, such as a passport or driver’s license. The report can be filed by anyone with authority from the reporting company, such as an employee, owner, or third-party service provider.

FinCEN launched the BOI E-Filing System website for reporting BOI on January 1, 2024. Any changes to ownership or control will also require businesses to file with FinCEN.

The penalties for violations or misreporting can be severe. Foreign companies violating the reporting requirements may be liable for penalties of up to $500 for each day of continuing violation and criminal penalties include up to two years imprisonment and up to a $10,000 fine.

In March 2025, the Treasury Department announced there would now be no penalties or fines for US citizens or domestic reporting companies or their beneficial owners.

Beneficial Ownership Information (BOI) reporting is a requirement established under the US Corporate Transparency Act (CTA) that obliges certain companies to disclose information about the individuals who ultimately own or control them (known as their beneficial owners) to the US Treasury’s Financial Crimes Enforcement Network (FinCEN).

A BOI report typically includes identifying details about the reporting company and its beneficial owners, such as names, dates of birth, addresses, and government-issued identification numbers, and is intended to reduce the misuse of legal entities for illicit purposes like money laundering and sanctions evasion.

Following regulatory changes in March 2025, FinCEN narrowed the scope of BOI reporting so that entities created in the United States and US persons are now exempt from reporting. The obligation generally applies to certain foreign companies registered to do business in the US that don’t qualify for an exemption.

Moody’s provides access to global sources of beneficial ownership data and other risk‑relevant information organizations may use to support corporate transparency work. This information can be incorporated into onboarding, risk assessment, ongoing monitoring, and enhanced due diligence activities, alongside an organization’s own policies, procedures, and controls.

Moody’s offers a range of tools and datasets designed to support entity identification and verification, help surface beneficial ownership relationships, highlight indicators commonly associated with complex or opaque ownership structures, and support screening activities related to politically exposed persons (PEPs), sanctions, and adverse media.

To find out more about how Moody’s data, analytics, and workflow solutions may be incorporated into your compliance and risk management frameworks, please get in touch any time.

*Disclaimer: This content is for informational purposes only and does not constitute legal, financial, compliance or other professional advice. Please consult with a qualified professional for specific legal, financial, compliance, or other professional advice. For more terms and conditions pertaining to Moody’s products and services, refer to the disclaimer on Moody’s website.