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BOI Reporting Exempt Companies

Under the Corporate Transparency Act (CTA), certain companies are exempt from BOI reporting requirements due to their size, structure, or the level of government oversight they already face.

5/8/20241 min read

Here’s a general description of exempt entities:

1. Large Operating Companies

A business with:
- More than 20 full-time employees in the U.S and
- A physical office in the U.S. and
- More than $5 million in gross receipts or sales in the previous year.
These companies are deemed low-risk for financial crimes due to their transparency and size.
Note: You must have all three to be considered exempt.

2. Regulated Entities

Companies already subject to extensive regulatory oversight, such as:
- Banks
- Credit unions
- Broker-dealers
- Insurance companies
- Investment advisors
- Public accounting firms.
These entities regularly report ownership and control information to other regulatory bodies.

3. Publicly Traded Companies

Entities listed on a U.S. stock exchange are exempt since their ownership is publicly disclosed.

4. Certain Nonprofits

501(c)(3) organizations (and certain other tax-exempt entities) are excluded due to their non-commercial nature and accountability to public financial reporting.

5. Subsidiaries of Exempt Entities

Any entity wholly owned by one or more exempt entities is also exempt from BOI reporting.

6. Other Exempt Entities

Governmental authorities and certain entities assisting governmental functions, such as utility companies.
Inactive entities that meet specific criteria (e.g., no significant operations or assets).

Why These Exemptions Exist

The exemptions aim to focus the BOI reporting on smaller, privately held companies that are less transparent and may pose a higher risk for financial crimes like money laundering or tax evasion.

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