BOI reporting for companies diversifying their offerings

High-level findings (concise)- Current scope (Interim Final Rule, March 26, 2025): FinCEN issued an interim final rule that (1) exempts entities created in the United States (previously called “domestic reporting companies”) and their U.S. beneficial owners from BOI reporting under the Corporate Transparency Act (CTA), and (2) limits BOI reporting obligations to certain foreign entities that have registered to do business in U.S. state/tribal jurisdictions.

See Federal Register and FinCEN press release. (Key effect: most U.S.-created companies currently do not have to file BOI reports to FinCEN under the IFR; foreign reporting companies generally must file.)- Deadlines: For foreign reporting companies, FinCEN set new deadlines: companies registered to do business in the U.S. before March 26, 2025, had to file by April 25, 2025; companies registering on/after March 26, 2025, must file within 30 calendar days after their registration becomes effective.

FinCEN also extended the general update/correction window to 30 days for affected companies under the IFR.- Updated-report timing and triggers: FinCEN’s FAQs and the Small Entity Compliance Guide require a reporting company to file an updated BOI report within 30 calendar days of any change to required reported information.

Examples of triggers include: legal name changes (e.g., new DBA), changes to beneficial owners (e.g., new CEO or ownership transfers that alter the 25% ownership threshold), changes to a beneficial owner’s reported identifying information (name, address, ID), and changes in jurisdiction of formation.

Conversions and reorganizations can also require an updated report where the filed information (name, jurisdiction) changes.- Exemptions and loss-of-exemption: FinCEN lists multiple exemptions (e.g., large operating company exemption, inactive entities, certain regulated entities, some pooled investment vehicles, publicly traded companies).

If an entity that previously qualified for an exemption loses that status (for example, by changes in size, ownership, or operations caused by diversification), the entity generally must file a BOI report within 30 calendar days after it no longer meets the exemption criteria.

Conversely, if an entity becomes newly exempt after filing, the company should file a “newly exempt entity” BOI report.- State-level interaction: FinCEN BOI reporting is federal; most states do not (currently) require separate federal-style BOI filings.

However, because FinCEN’s IFR narrowed federal coverage (exempting domestic companies), some states and state legislatures have considered or adopted state-level transparency laws (e.g., New York’s LLC Transparency Act processes and other state proposals).

Companies must continue to comply with state-level formation, registration, annual/renewal filings (DBAs, foreign qualifications, etc.). Those state filings may change a company’s circumstances (e.g., registering a foreign entity in a state may bring a foreign reporting company within FinCEN’s scope).

In short: do not assume a state filing replaces/duplicates FinCEN reporting obligations—assess both federal (FinCEN) and relevant state requirements.Practical guidance for companies diversifying offerings (actionable checklist)

Immediately assess entity classification

Determine whether your entity is (a) a U.S.-created entity (generally exempt under the IFR) or (b) a foreign entity registered to do business in the U.S. (likely within FinCEN’s current scope). If your company or structure changes due to diversification (e.g., you form a new U.S. subsidiary vs. register your foreign parent to do business in the U.S.), re-evaluate BOI exposure.

Track ownership and control changes closely

Diversification often involves new investments, new classes of equity, option pools, or management changes. Any change that alters who meets the beneficial ownership criteria (including the 25% ownership threshold or who exercises substantial control) can trigger the 30‑day update requirement.3) Watch exemption thresholds: If your growth/diversification increases employees, revenue, physical presence, or alters the entity’s activities, confirm whether the large operating company exemption (or other exemptions) applies or is lost. If exemption status changes, file the appropriate BOI initial or updated report within 30 days (or follow deadlines applicable to foreign reporting companies under the IFR).4) Coordinate state filings and FinCEN compliance: Registering as a foreign entity in additional states (to expand sales or operations) can change whether an entity is a “foreign reporting company” subject to BOI reporting. Before choosing to expand via foreign registration vs creating a new U.S entity, evaluate BOI implications. Keep records of state registration effective dates (they affect the 30‑day clock for any required FinCEN filing).5) Update reports promptly and keep evidence: If a reportable change occurs (name, address, ownership, jurisdiction, beneficial owner ID docs), file an updated BOI report within 30 days. Keep internal contemporaneous records documenting the change and the filing date (and copies of the filing). If you rely on a third-party filer, notify them in time to meet the 30‑day deadline.

Maintain compliance policies and internal controls

Implement a simple BOI compliance checklist tied to corporate events (new financing, employee equity grants, M&A, spin-offs, foreign registrations, conversions, name changes, and officer/board changes). Assign responsibility to legal/compliance or an external advisor to evaluate BOI impact for each event.

When in doubt, consult counsel or a compliance specialist

The regulatory landscape has been fluid and may continue to change. When restructuring, adding new business lines, or changing ownership, obtain legal advice to confirm reporting obligations and to prepare filings (especially where foreign entities are involved).

Monitor developments

FinCEN intended the March 2025 IFR to be subject to public comment and possible final rule adjustments; Congress and states have also considered related legislation. Monitor FinCEN announcements, the Federal Register, and state legislative updates (notably New York and any state transparency laws).Key takeaways specific to diversification scenarios- Adding a new product or service that does not change ownership or control: likely no BOI update required, unless the change requires a legal name change, leads to a new DBAs that you report, or changes jurisdiction of formation. But confirm whether the change impacts exemption criteria. - Selling equity or bringing in new investors to support diversification: likely triggers an updated BOI report if ownership shifts who meets the 25% ownership threshold or results in a new beneficial owner. - Creating a new U.S. subsidiary: historically created U.S. entities were “domestic reporting companies” (and under the IFR are exempt). But if you instead register a foreign entity to do business in the U.S., that foreign entity may be in scope and could be required to file. Choose structure with BOI impact in mind. - Converting entity type or moving jurisdiction (e.g., domestication or conversion): may require updated report where legal name or jurisdiction of formation changes.Notes on state-level resources and legislative activity- Several commentaries and legal alerts note that with the narrowing of federal BOI coverage, states may adopt or accelerate state-level transparency statutes (example referenced: New York’s LLC Transparency Act and related state proposals). Companies should monitor both state law developments and individual state Secretary of State guidance pages for updates about any state-level reporting requirements. (See Holland & Hart LLP commentary, Baker Donelson summary, and state-focused advisories.)Conclusion / Next recommended actions for you (concise)- If you are a U.S.-formed company diversifying product lines/services: document the corporate changes, confirm whether ownership/control changes occurred, and be ready to file BOI updates only if later rulemaking or state rules re-impose federal-style BOI obligations. Continue to monitor FinCEN updates. - If your diversification plan involves foreign registration (registering an existing foreign entity in U.S. states) or otherwise creates or increases foreign reporting company exposure: prioritize a BOI risk assessment now (identify beneficial owners and company applicants, prepare FinCEN IDs where necessary, and be prepared to meet the 30-day filing/update deadlines). - Adopt an internal BOI compliance checklist tied to corporate events (restructurings, new investors, cross-border registrations, officer changes) and consult counsel when ownership/control becomes ambiguous.