BOI compliance for digital agencies

The Financial Crimes Enforcement Network (FinCEN) has introduced significant changes to Beneficial Ownership Information (BOI) reporting requirements, particularly impacting U.S. businesses and LLC founders.

An interim final rule (IFR) published on March 26, 2025, revised the definition of a 'reporting company,' exempting entities created under U.S. law (formerly 'domestic reporting companies') from BOI reporting to FinCEN.

This means most U.S.-formed digital agencies, including domestic LLCs and corporations, are no longer required to file BOI reports with FinCEN. However, certain foreign entities registered to do business in the U.S. may still have reporting obligations with new filing deadlines.

For foreign entities that qualify as reporting companies under the IFR, specific deadlines apply. Those registered to do business in the U.S. before March 26, 2025, must file by April 25, 2025.

Entities registered on or after March 26, 2025, generally have 30 calendar days after receiving notice that their registration is effective. When reporting is required, BOI reports necessitate specific information for each beneficial owner: full name, date of birth, address, and an identifying document number (or a FinCEN identifier).

Filings are submitted electronically via FinCEN’s BOI E-Filing system. FinCEN's Small Entity Compliance Guide and FAQs clarify who constitutes a 'beneficial owner' (25% ownership or 'substantial control') and a 'company applicant,' detail the safe harbor for voluntary corrections, outline update timelines, and specify penalties for willful non-compliance.

Willfully failing to report complete or updated BOI can lead to civil and criminal penalties, including per-day civil penalties, fines, and imprisonment. A safe harbor provision exists, allowing for correction of inaccurate information within 90 days of the original deadline without penalty, provided it's done voluntarily.

Beyond federal requirements, several U.S. states and the District of Columbia have enacted or proposed their own beneficial ownership or transparency rules. These state-level regulations often require disclosure of owners or controllers to state filing offices or in state filings/biennial reports.

Notable examples include Washington, D.C. (with a 10% ownership threshold), New York, California (SB1201 proposed), Massachusetts, and Maryland. Even if domestic entities are exempt from federal FinCEN BOI reporting under the IFR, they must still confirm and comply with state-specific filing obligations where they are formed or conduct business.

Practical compliance steps for digital agencies and LLC founders include: Confirming entity classification (domestic vs. foreign reporting company) and jurisdiction. If a foreign entity registered in the U.S., determining and meeting filing deadlines via FinCEN’s BOI E-Filing system.

Identifying beneficial owners by collecting their full name, date of birth, current address, and an identifying document. Documenting individuals with 'substantial control' is also crucial, adhering to the 25% ownership + substantial control standard, while being aware of potentially lower state thresholds (e.g., D.C.'s 10% rule).

Maintaining internal BOI records, even if federally exempt, as banks or payment processors may request this information for customer due diligence. Creating a secure BOI intake form and storage, integrating BOI information collection into owner/member onboarding or operating agreements.

Utilizing FinCEN identifiers to streamline submissions and reduce repeated sharing of sensitive ID documents. Establishing a monitoring policy for changes in ownership/control and a process for timely updates and corrections.

Reviewing and updating operating agreements and service contracts to include clauses for BOI collection and cooperation. Consulting legal or accounting professionals for complex ownership structures or state-specific guidance.

FinCEN stores reported BOI in a secure, nonpublic database with strict access controls, governed by an Access and Safeguards Rule. However, state laws or other third-party requirements might lead to additional information flows, emphasizing the need for secure handling of identifying documents.

For domestic reporting companies that filed or prepared to file BOI reports prior to the IFR, FinCEN’s guidance indicates they are now formally exempted. It is advisable to check FinCEN guidance for any necessary updates or withdrawals and to retain documentation of any past filings or corrections.

The Financial Crimes Enforcement Network (FinCEN) has introduced significant changes to Beneficial Ownership Information (BOI) reporting requirements, particularly impacting U.S. businesses and LLC founders.

An interim final rule (IFR) published on March 26, 2025, revised the definition of a 'reporting company,' exempting entities created under U.S. law (formerly 'domestic reporting companies') from BOI reporting to FinCEN.

This means most U.S.-formed digital agencies, including domestic LLCs and corporations, are no longer required to file BOI reports with FinCEN. However, certain foreign entities registered to do business in the U.S. may still have reporting obligations with new filing deadlines.

For foreign entities that qualify as reporting companies under the IFR, specific deadlines apply. Those registered to do business in the U.S. before March 26, 2025, must file by April 25, 2025.

Entities registered on or after March 26, 2025, generally have 30 calendar days after receiving notice that their registration is effective. When reporting is required, BOI reports necessitate specific information for each beneficial owner: full name, date of birth, address, and an identifying document number (or a FinCEN identifier).

Filings are submitted electronically via FinCEN’s BOI E-Filing system. FinCEN's Small Entity Compliance Guide and FAQs clarify who constitutes a 'beneficial owner' (25% ownership or 'substantial control') and a 'company applicant,' detail the safe harbor for voluntary corrections, outline update timelines, and specify penalties for willful non-compliance.

Willfully failing to report complete or updated BOI can lead to civil and criminal penalties, including per-day civil penalties, fines, and imprisonment. A safe harbor provision exists, allowing for correction of inaccurate information within 90 days of the original deadline without penalty, provided it's done voluntarily.

Beyond federal requirements, several U.S. states and the District of Columbia have enacted or proposed their own beneficial ownership or transparency rules. These state-level regulations often require disclosure of owners or controllers to state filing offices or in state filings/biennial reports.

Notable examples include Washington, D.C. (with a 10% ownership threshold), New York, California (SB1201 proposed), Massachusetts, and Maryland. Even if domestic entities are exempt from federal FinCEN BOI reporting under the IFR, they must still confirm and comply with state-specific filing obligations where they are formed or conduct business.

Practical compliance steps for digital agencies and LLC founders include: Confirming entity classification (domestic vs. foreign reporting company) and jurisdiction. If a foreign entity registered in the U.S., determining and meeting filing deadlines via FinCEN’s BOI E-Filing system.

Identifying beneficial owners by collecting their full name, date of birth, current address, and an identifying document. Documenting individuals with 'substantial control' is also crucial, adhering to the 25% ownership + substantial control standard, while being aware of potentially lower state thresholds (e.g., D.C.'s 10% rule).

Maintaining internal BOI records, even if federally exempt, as banks or payment processors may request this information for customer due diligence. Creating a secure BOI intake form and storage, integrating BOI information collection into owner/member onboarding or operating agreements.

Utilizing FinCEN identifiers to streamline submissions and reduce repeated sharing of sensitive ID documents. Establishing a monitoring policy for changes in ownership/control and a process for timely updates and corrections.

Reviewing and updating operating agreements and service contracts to include clauses for BOI collection and cooperation. Consulting legal or accounting professionals for complex ownership structures or state-specific guidance.

FinCEN stores reported BOI in a secure, nonpublic database with strict access controls, governed by an Access and Safeguards Rule. However, state laws or other third-party requirements might lead to additional information flows, emphasizing the need for secure handling of identifying documents.

For domestic reporting companies that filed or prepared to file BOI reports prior to the IFR, FinCEN’s guidance indicates they are now formally exempted. It is advisable to check FinCEN guidance for any necessary updates or withdrawals and to retain documentation of any past filings or corrections.