If you own a small business, there’s an important new regulation on the horizon that you need to know about: the Beneficial Ownership Information (BOI) reporting requirement. Businesses meeting specific criteria must report key information to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. Failing to comply could result in steep penalties—don’t let it catch you off guard!
What Is the BOI Reporting Requirement?
The BOI report is a new federal reporting requirement created by the 2021 Corporate Transparency Act. It aims to increase transparency and combat financial crimes like money laundering and fraud. It applies to most companies formed or registered in the U.S., such as corporations, LLCs, and similar entities. Businesses must disclose details about their beneficial owners—individuals who own or control at least 25% of the company or who exercise substantial control over its operations.
What Information Needs to Be Reported?
You’ll need to provide FinCEN with:
Full legal name, date of birth, and residential address of each beneficial owner.
A photo copy of an identifying document, such as a driver’s license or U.S. passport.
Entity information, such as legal name, EIN, and formation details.
After the initial BOI report is filed, reporting companies must file any updates or corrections to the initial report info within 30 calendar days of any changes.
Key Deadlines
January 1, 2025: LLCs, corporations, and other reporting companies formed before January 1, 2024 have until January 1, 2025 to file their initial BOI report.
New entities formed during 2024 must file their BOI report within 90 days of registration.
New entities formed in 2025 and later must file their BOI report within 30 days of registration.
What is the penalty?
Under 31 U.S.C. §5336(h)(1)(B), it is unlawful for any person to willfully fail to report complete or updated beneficial ownership information. The penalty is $591 per day, up to a maximum of $10,000, and up to two years in prison.
What Should You Do Now?
Determine if your business is affected. Many small businesses are, so start assessing your ownership structure today.
Gather the required information to ensure a smooth filing process.
Act now to avoid penalties. Filing a BOI report isn’t optional, and failure to comply can result in fines of up to $500+ per day. Protect your business.
Need help navigating this new requirement? Contact us for guidance to ensure you meet your filing obligations on time.
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