The clock is ticking for businesses to comply with a critical new federal reporting requirement: BOI (Beneficial Ownership Information) reporting. If this is new to you, you’re not alone. Let’s break it down and ensure you’re prepared before the January 1 deadline.
What is BOI Reporting?
The Corporate Transparency Act (CTA), established in 2021, introduced BOI reporting to combat financial crimes like money laundering and fraud. Administered by the Financial Crimes Enforcement Network (FinCEN), this regulation mandates that many small and medium-sized businesses disclose their beneficial owners – the individuals who control or own a substantial interest in the company.
The BOI filing requirement applies to most U.S. businesses, but some exceptions exist (e.g., publicly traded companies and certain exempt entities). Non-compliance can lead to significant penalties, including fines of up to $500 per day and potential legal consequences.
Who Needs to File, and By When?
BOI reporting applies to corporations, LLCs, and similar entities registered or operating in the U.S. This includes some businesses in retail, field services, construction, assemblies, and inventory-based industries.
According to FinCEN:
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.
For more information on FinCEN, the BOI Report, and to file your report, contact your accountant or visit https://www.fincen.gov/boi.
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