BOI compliance for expanding corporate groups

As of the March 26, 2025 interim final rule, U.S.-formed entities (including U.S. LLCs and corporations) and their beneficial owners are exempt from FinCEN BOI reporting obligations under the CTA for now. The BOI reporting obligation currently applies only to certain foreign-formed entities that have registered to do business in a U.S. State or Tribal jurisdiction, and those foreign reporting companies must file BOI reports (focusing on non-U.S. beneficial owners) through FinCEN’s BOI E-Filing System within the IFR-specified deadlines. For expanding corporate groups, the practical compliance presumption is that each reporting company that meets the test must file separately; therefore, corporate groups should inventory entities, identify which (if any) remain BOI-reporting companies under the IFR, collect required information, and implement processes to file and timely update reports. Monitor FinCEN/Treasury for further rulemaking. Key findings from the interim final rule (effective March 26, 2025) include: 1) Scope change: FinCEN’s March 26, 2025 interim final rule narrowed the regulatory definition of 'reporting company' to only entities formed under the law of a foreign country that have registered to do business in any U.S. State or Tribal jurisdiction. Entities created in the United States (formerly 'domestic reporting companies') and their beneficial owners are exempt from BOI reporting to FinCEN under the CTA while the IFR is in effect. 2) Deadlines and filing relief: FinCEN provided additional time for foreign reporting companies. Entities registered to do business in the U.S. before March 26, 2025, generally had until April 25, 2025, to file initial BOI reports. Entities registered on or after March 26, 2025, have 30 calendar days after receiving notice that registration is effective to file. FinCEN stated it will not enforce BOI penalty/fine obligations against U.S. citizens or domestic reporting companies while the IFR is applied. 3) Beneficial owner definition and who must be reported: The IFR did not change the definition of 'beneficial owner.' However, foreign reporting companies are not required to report BOI for U.S. persons, and U.S. persons are exempt from providing BOI regarding reporting companies for which they are beneficial owners under the IFR’s adjustments. 4) What must be reported by (foreign) reporting companies: Foreign reporting companies must still file reports identifying the entity itself (legal name, trade names, addresses, foreign jurisdiction of formation, State/Tribal jurisdiction where registered) and identifying information about their (non-U.S.) beneficial owners (and in certain circumstances company applicants). Each reporting company must certify its report is true, correct, and complete. The IFR retains the reporting requirement for foreign reporting companies and requires updates/corrections as needed. 5) Corporate groups / parent–subsidiary issues: The rule retains an obligation on each reporting company to file the BOI report that identifies that entity and its beneficial owners; the report must contain information about the specific entity itself. The IFR language and FinCEN Q&As indicate the obligation attaches to the reporting company rather than allowing a single consolidated 'group' filing. Each reporting company in a corporate group that meets the reporting-company test (i.e., a foreign-formed entity registered in the U.S. and not otherwise exempt) needs to file its own BOI report. 6) Series LLCs and disregarded entities: The IFR redefines the scope of reporting companies (foreign-formed entities registered to do business in the U.S.) and does not change the definition of beneficial owner. Because the IFR excludes domestic-formed entities from reporting obligations, most U.S.-formed series or disregarded entities should be outside FinCEN BOI reporting obligations under the IFR; for foreign-formed series structures registered in the U.S., analyze formation/registration and ownership to decide filing obligations. 7) Filing mechanism and updates: BOI reports are filed through the FinCEN BOI E-Filing System. The IFR retains obligations to update or correct previously filed BOI reports; the IFR extended timing to 30 days after publication or registration date to give foreign reporting companies time to comply and continues to require updates/corrections within regulatory timeframes. 8) Penalties and enforcement posture: Under the IFR and related Treasury guidance, FinCEN will not enforce BOI penalties or fines against U.S. citizens or domestic reporting companies (while the IFR is in effect), and FinCEN has extended deadlines to give foreign reporting companies additional time. The IFR is interim and FinCEN invited comments and signaled a final rule may follow. Practical compliance guidance for expanding corporate groups includes: Step 1: Entity inventory – Map your corporate group and identify which entities (if any) are foreign-formed and registered to do business in a US State/Tribal jurisdiction. Step 2: Ownership mapping – For each potential reporting company, map ownership and control to identify beneficial owners under the statutory definition. For foreign reporting companies, focus on non-U.S. beneficial owners. Step 3: Collect documentation – For each beneficial owner to be reported, collect the required identifying information (name, DOB, address, unique identifying number from passport or other document, and an image of that document). Step 4: Entity-level filing – Each (foreign) reporting company must file its own BOI report through the FinCEN BOI E-Filing System and certify correctness. Step 5: Recordkeeping and processes – Create an internal compliance process to collect BOI, monitor triggers for updates, and file updates within regulatory timeframes. Step 6: Legal review and monitoring – Monitor FinCEN, Treasury, and state-level developments and consult counsel. State-specific considerations: The IFR’s registration trigger references filings with a secretary of state or similar office; therefore, identify where each entity is registered. Also monitor state statutes and secretary-of-state guidance because states may have their own information collection initiatives or requirements. For blog content, include a recommendation that readers check the secretary of state where their entities are registered for any state-level guidance and consult counsel for complex series/disregarded-entity and multi-jurisdictional structures.