Starting January 1, 2024, the Corporate Transparency Act (CTA) requires certain businesses to report their beneficial ownership information to FinCEN (the Financial Crimes Enforcement Network). However, there are 23 specific exemptions, which might mean your business is not required to report. Let’s take a closer look:
Disclaimer: Before diving into this list, please note that the information provided here is for general knowledge only and may not cover all the nuances of the Corporate Transparency Act (CTA). It’s crucial to consult with a qualified tax or legal professional to confirm whether your business qualifies for an exemption and to ensure compliance with the law.
Here are 23 Beneficial Ownership Information (BOI) Exemptions
1. Securities Reporting Issuer
Entities filing reports under the Securities Exchange Act of 1934 are exempt.
2. Government Entities
State and federal agencies, plus political subdivisions, don’t have to report.
3. Banks
Banks already regulated under federal law are exempt.
4. Credit Unions
State and federal credit unions are off the hook.
5. Holding Companies
If you’re a bank or savings and loan holding company, you qualify for an exemption.
6. Money Services Businesses
Businesses registered with FinCEN as money transmitters or services are covered.
7. Brokers/Dealers in Securities
SEC-registered brokers and dealers don’t need to report.
8. Securities Exchanges or Clearing Agencies
Registered exchanges and clearing agencies are exempt.
9. Other SEC-Registered Entities
Other entities registered under the Securities Exchange Act are covered.
10. Investment Companies/Advisers
Investment companies and advisers registered under federal law are exempt.
11. Venture Capital Fund Advisers
Advisers to venture capital funds also qualify for exemption.
12. Insurance Companies
Insurance companies defined by state laws are exempt.
13. Licensed Insurance Producers
If you’re an insurance producer with a physical office in the U.S., you’re in the clear.
14. Commodity Exchange Act Registered Entities
Entities registered with the Commodity Futures Trading Commission are exempt.
15. Public Accounting Firms
Public accounting firms registered under the Sarbanes-Oxley Act don’t need to report.
16. Public Utilities
Providers of electricity, water, gas, or telecom services are exempt.
17. Financial Market Utilities
Financial market utilities designated by the Financial Stability Oversight Council are covered.
18. Pooled Investment Vehicles
Pooled investment vehicles run by exempt entities are in the clear.
19. Tax-Exempt Organizations
Nonprofits with 501(c) status under the Internal Revenue Code are exempt.
20. Supporting Organizations
Organizations supporting tax-exempt entities are exempt as well.
21. Large Operating Companies
Businesses with more than 20 full-time U.S. employees, an office in the U.S., and $5 million+ in annual revenue qualify.
22. Subsidiaries of Exempt Entities
If you’re wholly owned by an exempt entity, you’re exempt too.
23. Inactive Entities
Entities dormant since before 2020 and meeting specific criteria don’t need to report.