Do You Need to File a Beneficial Ownership Information (BOI) Report?

The Beneficial Ownership Information (BOI) Reporting Rule has caused a lot of worry and confusion among small business owners across the country. This rule includes severe financial and even criminal penalties for those who don’t follow it. Adding to the confusion, some U.S. lawmakers are now trying to repeal the Corporate Transparency Act (CTA), which requires BOI reporting.

So, what should you do if you haven’t yet filed your BOI report with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN)? Here’s what you need to know.

Who Must Submit a BOI Report Under the Corporate Transparency Act?

Starting January 1, 2024, many businesses must file a BOI report. This includes both U.S. and foreign businesses that fit the definition of a “reporting company.”

Many small businesses (those with 20 or fewer full-time employees and $5 million or less in sales) must file this report.

• Domestic reporting company: A business created by filing documents with a state office, like a corporation or LLC (Limited Liability Company).
• Foreign reporting company: A business from another country that has registered to do business in the U.S. by filing documents with a state office.

Sole proprietorships and general partnerships don’t need to report because they aren’t registered legal entities. Also, 23 types of companies may be exempt from this rule. If you’re unsure if your business needs to file, it’s a good idea to talk to a lawyer.

Will the CTA Be Overturned?

Right now, two bills are trying to repeal the CTA. One was introduced by Congressman Warren Davidson and another by Senator Tommy Tuberville. Over 100 trade organizations support repealing the CTA, saying it represents “big-government overreach.”

However, it’s unclear if these bills will pass. If they do, the President also needs to approve them. We might be waiting for a while to find out what happens.

What Happens If You Don’t File?

If the CTA remains and BOI reporting stays mandatory, businesses that provide false information or fail to file could face penalties. These include:

• Civil fines of $591 per day, up to $10,000
• Criminal fines and possibly up to two years in prison

Here are the deadlines for reporting:

• Existing companies (created before January 1, 2024): File by January 1, 2025
• New companies (created between January 1, 2024, and January 1, 2025): File within 90 days of formation
• New companies (created after January 1, 2025): File within 30 days of formation
• Corrections: If you realize there’s a mistake, you must correct it within 30 days

Gathering the necessary information for a BOI report could take days or weeks, depending on your business size and structure. Waiting for a repeal that might not happen could cause you to miss the deadline.

You need to decide whether to file now and comply with the law or wait to see if it’s overturned. If you choose to file, FinCEN has a secure online system, the BOI E-Filing System, that’s easy to use.

Example of Filling Out the BOI Report Form

Here’s an example to help you understand how to fill out the BOI report form:

Step-by-Step Guide:

1. Access the BOI E-Filing System: Go to the FinCEN website and access the BOI E-Filing System.
2. Enter Business Information:
   • Business Name: XYZ Corporation
   • Business Address: 123 Business Street, Suite 456, Anytown, USA
   • EIN (Employer Identification Number): 12-3456789
   • Type of Business: Domestic Reporting Company
3. Enter Beneficial Owners Information:
   • Owner 1:
     • Name: John Doe
     • Birth Date: January 1, 1980
     • Address: 789 Residential Lane, Hometown, USA
     • Social Security Number: 123-45-6789
   • Owner 2:
     • Name: Jane Smith
     • Birth Date: February 2, 1985
     • Address: 456 Suburban Drive, Hometown, USA
     • Social Security Number: 987-65-4321
4. Enter Company Applicant Information:
   • Name: Michael Johnson
   • Birth Date: March 3, 1975
   • Address: 321 Urban Avenue, Cityville, USA
   • Social Security Number: 111-22-3333
5. Review and Submit: Review all the information to make sure it’s correct. Once you’ve confirmed everything, submit the report through the BOI E-Filing System.

By following these steps and making sure all the information is accurate, you can comply with the BOI reporting requirements and avoid penalties.

For more information and to start the filing process, visit the FinCEN BOI E-Filing System: FinCEN BOI E-Filing System.