In 2021, Congress enacted the bipartisan Corporate Transparency Act. In this Act, many companies doing business in the United States, would be required to complete The U.S. Beneficial Ownership Information (BOI ) report with the Treasury’s Financial Crimes Enforcement Network (FinCEN). The BOI Registry is a crucial step towards transparency and accountability. If you are/become an LLC or other corporate entity this information is very important to you! In this blog post, we’ll break down the essentials, guiding you through the what, where, who, when, and consequences of this report.
Understanding the BOI Report:
The BOI report aims to disclose the individuals who ultimately own or control a legal entity. This transparency measure is designed to unmask illicit financial activities such as trafficking and money laundering. The objective is to tell the government, you are a real business and who owns it. With that said, be sure to get all of the information before your filing, especially if you’re a small business, which most of my readers probably are.
Filing the Report – Where to Go:
To file, click here BOI report, or head to fincen.gov/boi and scroll down to the box labeled prepare. There you will find all the information you need for the filing process, making compliance accessible to all eligible entities. Be sure to read up on this report, speak with your tax preparer, and obtain all useful information prior to completing this filing.
Who Needs to File :
Entities that fall under the reporting requirements include corporations, limited liability companies (LLCs), and similar legal structures. If you have filed an entity with your Secretary of State then you are probably a business that needs to file a BOI. If your business is inactive or if your not sure if your company qualifies, you should reach out to a licensed CPA or tax professional for clarity. Understanding whether your business qualifies is essential to meeting compliance standards.
How Long Do You Have to Meet Compliance:
The deadline for compliance varies based on when you registered your business. FinCEN opened the report portal around January 1st 2024. If your business was registered before January 1, 2024, you must file by January 1, 2025. This is 1 year from the opening of the portal. Be sure to use this time to gain all the information you need to complete this filing knowegably. If you registered your business any time after January 1, 2024, so new businesses, you have 90 days from the creation/registration of the entity to file. Familiarize yourself with the deadlines relevant to your entity type.
What Will Happen If I’m Non-Compliant:
Failure to file the BOI report can lead to severe consequences. Penalties have been listed to include $500 a day, after the deadline, or $10,000 and up to 2 years in prison. Understanding the potential ramifications underscores the importance of timely and accurate reporting.
Navigating the BOI Registry doesn’t have to be daunting, and don’t freak out about it. The form is relatively straightforward to complete, asking for some basic information. Be sure to take the time you need to understand the BOI report. By grasping the fundamentals of the BOI report, knowing where to file, understanding who must comply, adhering to deadlines, and being aware of penalties, you can ensure your business remains in good standing while contributing to a more transparent financial landscape.