There has been a lot of buzz about BOI (Beneficial Ownership Information) and what it means for small business owners. But there also hasn’t been much information distributed from the federal government about what actually needs to be done by entrepreneurs, what they need to do, and why this is important. That’s why you’re here, to learn what you need to know as a business owner about BOI and how to keep your business in good standing with the federal government!

So let’s dive into what BOI is and what you may need to do between now and the end of the year…

What Is Beneficial Ownership Information?

Beneficial Ownership Information (according to fincen.gov) “refers to identifying information about the individuals who directly or indirectly own or control a company.” Back in 2021, the Corporate Transparency Act was passed that requires this Beneficial Ownership Information to be reported to the federal government to keep “bad actors” from hiding “ill gotten gains” in “shell companies or other opaque ownership structures.”

The goal of the Corporate Transparency Act is exactly that: Transparency. Since most businesses have two parts of their registration (one with their state and a second part with the IRS/Federal Government), this requirement acts as an extension of those procedures to provide federal government agencies with access to information not just on companies themselves but on who is responsible for their business activities.

This information will be accessible to federal, state, and local government agencies as well as select other groups that cooperate with government agencies to enforce the law. For a full list of agencies that will have access to your Beneficial Ownership Information, please visit fincen.gov/boi-faqs.

What Are the Requirements for Your Business?

The first step in the process is to determine whether or not your business is required to file a Beneficial Ownership Information report. There are a select number of business types that are exempt from having to file a BOI report.

The second step of the process is to identify your “beneficial owners.” This includes individuals that have 25% or more of your company or have substantial control over the business itself. Once you have identified these individuals for your organization, you will need to report their full name, date of birth, address, government issues identification, and what control or percentage of ownership they have over the business.

The third step is to actually file your report with the appropriate information you’ve collected once you’ve documented it for your business. It can be a helpful exercise for your company to clarify who has decision-making authority, ownership, and influence on your company operations.

Where Can I Submit My Report?

You can file your BOI report at FinCEN.gov at no cost. If you would like additional help to make sure that your report meets these critical legal obligations in a streamlined and timely fashion, you can file your BOI report with our team!

While you are certainly more than welcome to submit your report directly with the federal government, we added this process for our customers to make sure you have an easy experience submitting your information and have the backing of our team to handle the filing on your behalf. And when you work with us, we make sure that your filing is accurate, timely, and compliant! We will check your business status to determine what requirements there are for your business under the Corporate Transparency Act. Then we will handle all of the reporting requirements from the paperwork, finalizing the submission, and sending it off to fulfill your Beneficial Ownership Information requirements.

What Is the Deadline to Submit this Report?

Any company that was formed before January 1, 2024 has until January 1, 2025 to submit this report. Companies formed between January 1, 2024 and before January 1, 2025 have 90 days to submit their BOI report to the federal government. Companies formed on or after January 1, 2025 will have 30 days to submit their report. (fincen.gov)

And yes, there are penalties for failing to submit this report by the specified deadline. According to claconnect.com, “A person who willfully fails to comply with BOI reporting may be subject to civil penalties of $500 per day (adjusted for inflation it is now $591 per day) and criminal penalties including a $10,000 fine and/or up to two years of imprisonment.”

Needless to say, filing your BOI report should be a top priority for your business, and the penalties for failing to submit this information are steep.

Other Factors to Consider

Why is BOI Reporting Important?

Beneficial Ownership Information reporting is important because it helps the federal, state, and local government prevent financial crimes that may be easier to commit due to what FinCEN refers to as “opaque ownership structures.” The overall intent of the Corporate Transparency Act is to improve government access to information on specific company ownership to determine what actors are responsible for running the business and making decisions with finances and other important business functions.

How does the Government Intend to Use This Information?

The purpose of having this information is to help the government prevent financial crimes and money laundering. Approved government agencies will have access to this information to coordinate and enforce the law specifically in regards to financial crimes. For a full list of agencies that will have access to your Beneficial Ownership Information, you can visit fincen.gov and look up their FAQs on their BOI information page.

What Should I do if I’m Lost and Don’t Know How To Move Forward with BOI?

The best way to move forward if you’re finding the BOI process confusing is to chat with our team members! They’re educated on the process, what steps you’ll need to take, and how they can handle the filing if you don’t feel comfortable handling it on your own. You can start the process with them today!