Not every business must file a BOIR report, but most do. The Corporate Transparency Act casts a wide net, requiring the majority of U.S. companies to report their beneficial owners. Understanding whether your business must file—or qualifies for an exemption—is the first step toward compliance.
The Basic Rule: Most Businesses Must File
If your company was created by filing a document with a state (or registered as a foreign company to do business in a state), you likely need to file BOIR.
Must file:
- Limited liability companies (LLCs)
- Corporations (C-corps, S-corps)
- Limited partnerships (LPs)
- Limited liability partnerships (LLPs)
- Other entities created by state filing
Don’t need to file:
- Sole proprietorships (no state formation filing)
- General partnerships (typically no state filing required)
- Trusts (not created by state filing)
The 23 Exemptions
The Corporate Transparency Act exempts 23 categories of entities. These exemptions exist because the entities either already report to federal regulators or are large enough that their ownership is reasonably transparent.
1. Securities Reporting Issuers
Companies that file reports with the SEC under the Securities Exchange Act of 1934.
Why exempt: Already disclose ownership information publicly.
2. Governmental Authorities
Federal, state, local, and tribal government entities.
Why exempt: Government ownership is public.
3. Banks
Banks as defined under federal law.
Why exempt: Already heavily regulated with ownership disclosure requirements.
4. Credit Unions
Credit unions under federal or state law.
Why exempt: Regulated by NCUA or state regulators.
5. Depository Institution Holding Companies
Bank holding companies and similar entities.
Why exempt: Regulated by Federal Reserve and other agencies.
6. Money Services Businesses
Registered money transmitters and similar businesses.
Why exempt: Already registered with FinCEN.
7. Broker-Dealers
Securities brokers and dealers registered with the SEC.
Why exempt: Already file ownership information with SEC/FINRA.
8. Securities Exchanges and Clearing Agencies
National securities exchanges and registered clearing agencies.
Why exempt: Heavily regulated entities with public ownership.
9. Other Exchange Act Registered Entities
Certain other entities registered under the Securities Exchange Act.
Why exempt: Already report to SEC.
10. Investment Companies
Registered investment companies under the Investment Company Act.
Why exempt: SEC-regulated with disclosure requirements.
11. Investment Advisers
Investment advisers registered with the SEC.
Why exempt: Already file ownership information with SEC.
12. Venture Capital Fund Advisers
Venture capital fund advisers registered with SEC.
Why exempt: Reporting requirements already exist.
13. Insurance Companies
Insurance companies as defined under state law.
Why exempt: State insurance regulators require ownership disclosure.
14. State-Licensed Insurance Producers
Insurance producers licensed by a state.
Why exempt: State regulatory oversight.
15. Commodity Exchange Act Registered Entities
Entities registered under the Commodity Exchange Act.
Why exempt: CFTC oversight includes ownership disclosure.
16. Accounting Firms
Public accounting firms registered with PCAOB.
Why exempt: PCAOB registration includes ownership information.
17. Public Utilities
Regulated public utilities under federal or state law.
Why exempt: Public utility commissions require ownership disclosure.
18. Financial Market Utilities
Designated financial market utilities.
Why exempt: Federal Reserve oversight.
19. Pooled Investment Vehicles
Certain pooled investment vehicles operated by exempt entities.
Why exempt: Investment adviser already reports.
20. Tax-Exempt Entities
Organizations exempt under Section 501(c) of the Internal Revenue Code.
Why exempt: IRS already has organizational information.
Includes:
- 501(c)(3) charities
- 501(c)(4) social welfare organizations
- 501(c)(6) business leagues
- Other 501(c) entities
21. Entities Assisting Tax-Exempt Entities
Certain entities that operate exclusively to support tax-exempt entities.
Why exempt: Already report to IRS.
22. Large Operating Companies
This is the exemption most relevant to established businesses.
Requirements (all three must be met):
- More than 20 full-time employees in the U.S.
- More than $5 million in gross receipts or sales (reported on prior year tax return)
- Operating presence at a physical office in the U.S.
Important details:
- Full-time = 30+ hours per week
- The $5 million is gross receipts, not net income
- The physical office must be yours (not a registered agent address)
23. Subsidiaries of Exempt Entities
Entities whose ownership interests are controlled or wholly owned by an exempt entity.
Requirement: The parent company must be exempt under one of the other 22 exemptions.
Analyzing the Large Operating Company Exemption
Most small businesses hope to qualify for the Large Operating Company exemption but don’t meet all three requirements.
The 20+ Employee Requirement
| Counts as Employees | Doesn’t Count |
|---|---|
| W-2 employees working 30+ hours | Independent contractors |
| Full-time remote employees | Part-time employees |
| U.S.-based employees | Foreign employees |
Example: A company with 15 full-time employees and 10 part-time employees doesn’t qualify (only 15 count).
The $5 Million Revenue Requirement
This is based on gross receipts or sales as reported on your prior year federal tax return.
Form 1120 (corporations): Line 1a Form 1065 (partnerships): Line 1a Form 1120-S (S-corps): Line 1a
The Physical Office Requirement
You must have an operating presence at a physical office in the United States that you own or lease.
Qualifies:
- Office space you lease
- Retail location
- Warehouse or facility
Doesn’t qualify:
- Registered agent’s address
- Virtual office
- Coworking space (generally)
- Home office (in most cases)
Common Scenarios
Single-Member LLC
Must file? Yes (unless exempt)
Single-member LLCs are the most common entities caught off guard by BOIR. The sole owner is the beneficial owner, and the LLC must file unless it meets an exemption.
Small Business with Employees
Must file? Usually yes
Most small businesses don’t have 20+ full-time employees AND $5 million revenue AND a physical office. Failing any one requirement means you must file.
Real Estate Holding Company
Must file? Yes
Holding companies that own rental properties are not exempt. They don’t have employees, so they can’t meet the large operating company exemption.
Professional Practices (Law Firms, Medical Practices)
Must file? Usually yes
Most professional practices are formed as LLCs or professional corporations. Unless they meet the large operating company exemption, they must file.
Inactive or Dormant Company
Must file? Yes
Even if your company has no operations, if it exists as a legal entity, it must file (unless exempt). Consider dissolving inactive entities if you don’t want BOIR obligations.
How to Determine If You Must File
Step 1: Is Your Entity a Reporting Company?
Was it created by filing with a state? If yes, continue.
Step 2: Review Each Exemption
Go through the 23 exemptions. Do you clearly qualify for any?
Step 3: Check the Large Operating Company Exemption
- Do you have 20+ full-time U.S. employees?
- Did you report $5M+ gross receipts on your last tax return?
- Do you have a physical U.S. office?
All three must be yes to qualify.
Step 4: When in Doubt, File
If you’re uncertain whether an exemption applies, file anyway. There’s no penalty for filing when you didn’t need to, but severe penalties for not filing when you should have.
What If Your Status Changes?
Newly Exempt
If your company grows to meet the large operating company exemption, you can file a report claiming the exemption. Keep documentation proving you meet all three criteria.
No Longer Exempt
If you lose exempt status (for example, employee count drops below 20), you must file a BOIR within 30 days.
Get Help Determining Your Filing Status
Not sure if your business must file BOIR? Critical Compliance Services helps Florida businesses understand their obligations.
We provide:
- Filing status analysis
- Exemption review
- Filing assistance if required
Frequently Asked Questions
Do sole proprietors need to file BOIR?
No. Sole proprietorships without a separate legal entity (no LLC or corporation) don’t need to file. BOIR only applies to entities created by state filing.
Does my nonprofit need to file?
If your nonprofit has 501(c) status from the IRS, it’s exempt. If you haven’t obtained tax-exempt status, you may need to file.
I have a small LLC with no employees. Do I need to file?
Yes. Small LLCs are the most common entities required to file. The large operating company exemption requires 20+ employees.
My company is inactive. Do I still need to file?
Yes. An inactive company that exists as a legal entity must file unless exempt. Consider dissolving the entity if you no longer need it.
What if I qualify for an exemption but I’m not sure?
File anyway. There’s no penalty for filing when you didn’t need to. The penalty for not filing when you should have is $500/day.