Here we are discussing who is exempt from filing a BOI report? While most LLCs, corporations, partnerships and other legal entities are required to file a BOI report, certain companies are exempt and do not need to file a BOI report or correct or update a BOI report.   

If your company is exempt, it does not need to file a BOI report. However, if your exempt company later becomes subject to the BOI filing requirement, then it must file a BOI report within 30 days of the date that it stopped being exempt. After, your company needs to file any corrected or updated BOI reports, if applicable.

Let’s explore in detail who is exempt from filing a BOI report.

Companies exempt from BOI report

In general, all companies that are required to report must file a BOI report. This includes companies that have never been exempt from BOI reporting, as well as companies that were previously exempt but are no longer exempt.

In addition, any company that meets the criteria for exemption from filing a BOI report is exempt, regardless of the type of legal entity. This includes companies that are organized as corporations, LLCs, limited partnerships (LPs), or other types of entities.

Your company is exempt from filing a BOI report if it falls under one of the following: 

1. SEC reporting securities issuer
2. Domestic governmental authority
3. Bank
4. Domestic credit union
5. Depository institution holding company
6. Money transmitting business
7. Brokers or dealers in securities
8. Securities exchange or clearing agencies,
9. Other entities registered pursuant to the Securities Exchange Act of 1934 entities,
10. Registered investment companies and investment advisers,
11. Venture capital fund advisers
12. Insurance companies
13. State licensed insurance producers,
14. Entities registered pursuant to the Commodity Exchange Act
15. Accounting firms
16. Public utilities
17. Financial market utilities
18. Pooled investment vehicles
19. Tax exempt entities
20. Entities assisting tax exempt entities
21. Large operating companies
22. Subsidiaries of certain exempt entities
23. Inactive businesses

Tax-exempt entities are exempt from BOI Report

If your company is a tax-exempt entity, it is exempt from filing a BOI report. To be a tax-exempt entity, your company must meet of the following criteria:

1. It is an organization under Section 501 (a) and (c) of the Internal Revenue Code (Code)
2. It is within the 180-day period beginning on the date of loss of the organization’s tax-exempt status under Section 501 (c) and 501 (a) of the Code
3. It is a political organization under Section 527 (a) and (e)(1) of the Code; or
4. It is a charitable trust or split-interest trust under Section 4947(a) of the Code

An organization under Section 501 of the Code includes:

• Corporations Organized Under Act of Congress (including Federal Credit Unions)
• Title Holding Corporations for Exempt Organization
• Civic Leagues and Social Welfare Organizations and Local Associations of Employees
• Labor, Agricultural and Horticultural Organizations
• Business Leagues, etc.
• Social and Recreation Clubs
• Fraternal Beneficiary Societies
• Voluntary Employees’ Beneficiary Associations
• Domestic Fraternal Societies
• Teachers’ Retirement Fund Associations
• Benevolent Life Insurance Associations, Mutual Ditch or Irrigation Companies, Mutual or Cooperative Telephone Companies, or Like Organizations
• Cemetery Companies
• State Chartered Credit Unions, Mutual Reserve Funds
• Mutual Insurance Companies or Associations
• Cooperative Organizations to Finance Crop Operations
• Supplemental Unemployment Benefit Trusts
• Employee Funded Pension Trusts
• Veterans’ Organizations
• Black Lung Benefit Trusts
• Withdrawal Liability Payment Funds
• Title Holding Corporations or Trusts with Multiple Parents
• State-Sponsored High-Risk Health Coverage Organizations
• State-Sponsored Worker’s Compensation Reinsurance Organizations
• National Railroad Retirement Investment Trust 
• Qualified Nonprofit Health Insurance Issuers

A political organization is a political organization as a party, committee, association, fund or other organization (whether or not incorporated), organized and operated primarily for the purpose of accepting contributions or making expenditures, or both, for an exempt function.

Large companies are exempt from BOI Report

If your company is a large operating company, it does not need to fila a BOI report. Your company qualifies as a large company if it meets all of the following:

1. Employs more than 20 full-time employees in the US
2. Has more than $ 5 million gross revenue on most recent IRS tax return, and
3. Operates from a physical office location in the US   

Subsidiaries of certain exempt entities are exempt from BOI Report  

If your reporting company is a subsidiary of an exempt company excluding entities assisting tax-exempt entities, inactive businesses and pooled investment vehicles, then it does not need to file a BOI report. Your company is a subsidiary of exempt entities if its ownership interests are controlled or wholly owned, directly or indirectly, by one or more exempt entities not including entities assisting tax-exempt entities, inactive businesses and pooled investment vehicles.

Subsidiaries of entities assisting tax-exempt entities, inactive businesses and pooled investment vehicles do not fall under the exception for subsidiaries of certain exempt entities and may need to file a BOI report.

Inactive businesses are exempt from BOI Report

If your company is an inactive business, it does not need to fila a BOI report. Your company qualifies as an inactive business if it meets all of the following criteria:

1. It was in existence on or before January 1, 2020
2. It is not engaged in any active business
3. It is not owned, directly or indirectly, wholly or partially, by a foreign person
4. It has not changed its ownership in the past 12 months
5. It has not sent and or received more than $1,000 in the past 12 months, and  
6. It does not hold any type of assets in the US or abroad  

Companies previously exempt from filing a BOI report

Companies that are no longer exempt from filing a BOI report must file a report within 30 days of the date that they cease to be exempt.

For example, if your company was an inactive business exempt from filing a BOI report and later becomes an active business, then you need to file an initial BOI report within 30 days of the date the company stops being exempt from BOI filing requirements.

Are you wondering if you need to file a BOI Report? Contact us and we’ll clarify all aspects regarding BOI Report related to your company profile!