BOI compliance support for multi-founder SaaS startups

Understanding BOI Compliance for Multi-Founder SaaS Startups: A 2026 Guide The landscape of Beneficial Ownership Information (BOI) reporting has seen significant changes, particularly with FinCEN's recent Interim Final Rule (IFR).

While federal obligations have shifted for many U.S. companies, state-level requirements are emerging, making a nuanced approach to compliance essential for multi-founder SaaS startups. Federal BOI Status: A Shift for U.S.

Companies As of March 26, 2025, FinCEN's IFR has substantially narrowed the scope of the Corporate Transparency Act (CTA). This rule formally exempts entities formed under U.S. law (previously 'domestic reporting companies') and U.S. persons from federal BOI reporting to FinCEN.

This means that most U.S. startups, whether C-corps or LLCs, are currently not required to file BOI reports with FinCEN. However, foreign companies registered to do business in U.S. jurisdictions still retain reporting obligations, though not for U.S. persons as beneficial owners.

It's crucial to monitor FinCEN for any future rule changes. The Rise of State-Level Transparency: Don't Overlook Local Rules Despite federal relief, a new patchwork of state-level beneficial ownership reporting requirements is taking shape. * New York LLC Transparency Act (NYTA): Effective January 1, 2026, LLCs formed in New York or foreign LLCs doing business in New York must file confidential Beneficial Ownership Reports (BORs) with the New York Department of State, unless exempt.

Existing LLCs have until January 1, 2027, to file, while new LLCs formed or registered in New York on or after January 1, 2026, must file within 30 days. The NYTA applies exclusively to LLCs, includes company applicant reporting, and mandates annual confirmations and penalties for non-compliance.

While BORs are nonpublic, they are accessible to law enforcement. * Other States: Several other states, including California, Massachusetts, Maryland, Texas, and South Dakota, have either considered or enacted their own "mini-CTA" legislation.

This means U.S. startups must actively check their state(s) of formation and any states where they are "doing business" for specific filing obligations. Identifying Beneficial Owners in Multi-Founder SaaS Startups For any applicable reporting regime (federal for foreign entities, or state-level), identifying beneficial owners is key.

A beneficial owner is generally defined as any individual who: * Exercises substantial control over the reporting company; OR * Owns or controls at least 25 percent of the ownership interests of the reporting company. 'Substantial control' is a broad concept, encompassing senior officers, individuals with authority to appoint or remove officers/directors, those with significant decision-making power, or individuals with contractual rights that grant control.

Navigating Complex Ownership: SAFEs, Convertible Notes, and Options The treatment of contingent or future interests is a common question for startups: * General Rule: Unexercised options, unconverted SAFEs, or convertible notes are typically not considered current "ownership interests" for the 25% quantitative test. * Control Rights are Key: However, if agreements related to these instruments confer present control rights (e.g., voting rights, veto power, board seats, or side agreements that grant effective control), the individuals holding these rights may be considered beneficial owners under the 'substantial control' prong. * Option Pools: Ungranted or unexercised options within an option pool generally do not create individual beneficial owners. * VC Investors: Even if a venture capital investor does not meet the 25% ownership threshold, their representatives with direct board seats or significant governance vetoes should be assessed as potential beneficial owners due to their substantial control.

Nominee Arrangements If ownership interests are held by nominees on behalf of others, the underlying natural person(s) who ultimately exercise control or ownership must be identified and reported. Maintain clear documentation of such arrangements.

Penalties for Non-Compliance Historically, willful failure to report complete or updated BOI to FinCEN could lead to civil penalties of up to $500 per day and criminal penalties including imprisonment for up to two years and/or a fine of up to $10,

State-level non-compliance will also carry its own set of penalties. Actionable Compliance Checklist for Startups

Entity Inventory

Compile a list of all your legal entities (U.S. domestic corporations, LLCs, foreign entities) and their jurisdictions of formation and qualification.

Federal Exposure Check

Confirm if your company, based on its formation jurisdiction, has any federal BOI obligations to FinCEN under the current IFR. For most U.S.-formed entities, this is currently not required.

State Obligations Check

Immediately verify beneficial ownership filing requirements in your state(s) of formation and where you are registered/doing business. Pay close attention to the New York LLC Transparency Act if you have New York nexus as an LLC.

Cap Table & Control Map

Develop a current capitalization table and a control map. Identify all individuals who own or control ≥25% of ownership interests or exercise substantial control.

Collect BOI Data

For identified beneficial owners and company applicants (if required by state rules), gather necessary data: full name, date of birth, current residential address, and government ID number/issuing jurisdiction.

FinCEN IDs

If privacy or volume is a concern, encourage beneficial owners to obtain a FinCEN identifier (when available) to streamline reporting where accepted.

Change Management Process

Establish a process to track events that trigger update obligations (e.g., equity transfers, new investors, changes in control).

Legal Counsel & Vendor Support

Engage legal counsel to confirm specific obligations and consider reputable corporate services or compliance vendors for secure data collection and filing.