Current BOI Beneficial Owner Definition Record

Current BOI Beneficial Owner Definition Record

Scope gate

The beneficial-owner definition in 31 CFR 1010.380 matters only after an entity falls within the current reporting-company definition and does not qualify for an exemption.

Under the current rule, that first gate generally requires an entity formed under foreign law and registered to do business in a U.S. State or Tribal jurisdiction through a qualifying filing. Entities created in the United States are exempt. Reporting companies do not report U.S. persons as beneficial owners, and U.S. persons are exempt from providing that information for a reporting company.

Definition

The current text of 31 CFR 1010.380 defines a beneficial owner of a reporting company as an individual who directly or indirectly exercises substantial control over the company or owns or controls at least 25 percent of its ownership interests.

Substantial control includes serving as a senior officer, having authority over appointment or removal of senior officers or a majority of the governing body, directing or substantially influencing important decisions, or having another form of substantial control.

Ownership interests extend beyond ordinary stock. The rule addresses capital and profit interests, convertible instruments, options, joint ownership, nominees, certain trust relationships, and ownership through intermediary entities. A percentage calculation can therefore require legal and factual analysis.

Exceptions

The rule contains conditional exceptions for a minor child, a nominee or agent, certain employees, a future interest through inheritance, and certain creditors. These are exact regulatory conditions, not labels that can be assumed from a job title or contract name.

Different definitions must stay separate

FinCEN's BOI reporting rule and its Customer Due Diligence rule both use beneficial-ownership concepts, but they serve different actors and duties. The CDD rule governs covered financial institutions dealing with legal-entity customers. The CTA rule governs reporting companies that submit BOI to FinCEN. A real-estate reporting rule may use another context-specific definition.

Use boundary

No public example can establish that a real person is or is not a beneficial owner. Readers should use the current rule, current FinCEN guidance, and qualified counsel for their facts. The page must never ask readers to submit identity documents or personal identifiers.