What Is Beneficial Ownership Information (BOI) Filing?

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The Beneficial Ownership Information (BOI) filing is a mandatory requirement introduced by the Corporate Transparency Act (CTA). This law, enacted to combat money laundering, terrorist financing, and other financial crimes, requires most U.S. businesses to report key details about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This is the official site for filing and filing instructions https://boiefiling.fincen.gov/ .

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A "beneficial owner" is generally defined as an individual who:

• Owns or controls 25% or more of a company’s ownership interest; or

• Exercises substantial control over the company, either directly or indirectly.

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Who Is Required to File?

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Most corporations, limited liability companies (LLCs), and other similar business entities created or registered to do business in the U.S. must comply with BOI reporting. The filing requirement applies to both newly formed and existing businesses. Key details that must be submitted include:

• The full name of the beneficial owner(s)

• Date of birth

• Residential or business address

• A unique identifying number, such as a driver’s license or passport number

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However, there are some exemptions to the filing requirement, which include:

• Publicly traded companies

• Large companies with more than 20 full-time employees, over $5 million in annual revenue, and a physical office in the U.S.

• Certain regulated entities, such as banks, credit unions, and insurance companies

• Tax-exempt organizations, including most nonprofits

• Governmental authorities

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Filing Deadline: When Do You Need to File?

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The BOI filing requirement officially starts in 2024. Here are the key deadlines:

• Newly formed businesses: Entities created after January 1, 2024, must file their BOI within 30 days of formation.

• Existing businesses: Businesses formed before January 1, 2024, have until January 1, 2025, to submit their BOI.

Failure to file within the required timeframe can lead to substantial penalties.

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How to File the BOI

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Filing the BOI is a straightforward process, but it must be done accurately to avoid penalties. Businesses will need to submit their BOI electronically through the FinCEN reporting portal. The following steps outline the general process:

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1. Gather the necessary information about each beneficial owner, including their name, birth date, residential or business address, and unique identification number (such as a driver’s license or passport).

2. Create an account on the FinCEN portal or log into an existing account.

3. Complete the online BOI report, ensuring that all information is accurate.

4. Submit the report and keep a copy for your records.

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You may also choose to work with a professional to handle the filing process on your behalf. This option is particularly useful for ensuring compliance, especially for businesses with multiple owners or complex structures.

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Penalties for Non-Compliance.

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The consequences for failing to comply with the BOI filing requirement are significant. Businesses that do not submit their BOI by the deadline face daily fines of $500, with the total amount reaching up to $10,000. In addition to financial penalties, individuals responsible for non-compliance could face criminal penalties, including imprisonment.

Given these potential penalties, it’s essential to ensure that your business submits its BOI on time and that the information provided is accurate.

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Which Businesses Are Exempt?

 

Not all businesses are required to file BOI reports. Entities that are exempt from the requirement include:

• Publicly traded companies

• Financial institutions, such as banks and credit unions

• Insurance companies

• Large operating companies with more than 20 employees and at least $5 million in annual revenue

• Government entities

• Nonprofit organizations and tax-exempt entities under the Internal Revenue Code

If you’re unsure whether your business qualifies for an exemption, it’s a good idea to consult with a tax or legal professional to ensure compliance.

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Conclusion: Stay Compliant and Avoid Penalties

The new BOI filing requirement represents an important regulatory change for U.S. businesses in 2024. Most companies will need to report information about their beneficial owners to FinCEN, with strict penalties for non-compliance. If you’re unsure whether you need to file or would prefer professional assistance in handling the process, I offer filing services to ensure everything is completed correctly and on time.

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To learn more about how I can help you with your BOI filing or to discuss whether your business is exempt, feel free to reach out!