Why You Might Want to Consider Completing Your BOI Report

structure & legal Jan 01, 2025

While reporting is currently voluntary, you might want to consider completing your BOI (Beneficial Ownership Information) reporting anyway.

The Corporate Transparency Act (CTA) is a key regulation enacted in 2021 to promote transparency in business ownership and prevent illegal financial activities. It requires businesses to disclose their true owners to the U.S. government. The original deadline to file for existing businesses was supposed to be January 1st, 2025. However, due to ongoing litigation, the requirement for reporting is currently on pause. While this may seem like good news - one less thing to worry about as a business owner - you may want to consider completing your voluntary submission. Here's why.

When the requirement was in place, the penalties for non-filing were steep! In just the last two weeks, the requirement has been suspended, then reinstated, and now suspended again. If you don't keep up on the latest requirements, it's possible that you'll miss the requirement being reinstated again. And, if you do, you could be in for significant penalties.

The filing is simple, and it's free. It does not cost you to file and it requires only information that you should already have. While it may seem to be a nuisance, you have likely already reported this information in another state or federal filing and this is a one-time filing requirement, so if you just get it done, then you don't have to worry about it.

As of January 1st, 2025, the BOI Reporting is not required, however, you may want to consider your voluntary submission to ensure your business is compliant should the requirement be reinstated.

More Information on the CTA

Under the CTA, certain businesses must file a Beneficial Ownership Information (BOI) report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). A “beneficial owner” is defined as anyone who owns or controls at least 25% of a company or significantly influences its decisions. The BOI report ensures the government knows who genuinely owns and controls U.S. businesses.

Who Needs to File?

Businesses required to file fall into two main categories:

Domestic Reporting Companies – Includes U.S.-based corporations, LLCs, or other entities that filed official documents (e.g., articles of incorporation) to operate.
Foreign Reporting Companies – Companies formed outside the U.S. but legally registered to conduct business within the country.

Certain entities, such as banks, credit unions, large corporations, and insurance companies, are exempt. There are 23 specific exemptions; check if your business qualifies.

Filing Deadlines and Frequency

Filing deadlines vary based on when your business was formed:

Businesses created before January 1, 2024: File your BOI report by January 1, 2025.
Businesses formed in 2024: File within 90 days of receiving public notice of your company’s creation.
Businesses formed after January 1, 2025: File within 30 days of registration.

You only need to file once unless there are changes to your beneficial ownership or you need to correct errors. Note: There’s no requirement to report a company’s termination or dissolution.

What Information Should You Report?

The BOI report requires the following details for each beneficial owner:

Full legal name
Date of birth
Current residential address
A unique ID number (e.g., passport or driver’s license number)

This data ensures clarity on who controls the business.

How to File

Filing your BOI report is straightforward and free. Use FinCEN’s secure electronic system to submit your information.

Penalties for Non-Compliance

Failing to file or providing incorrect information can result in:

Civil penalties: $500 per day, up to $10,000
Criminal penalties: Up to two years in prison for willful violations

Senior company officers can also be held personally liable for non-compliance.

Resources to Help You

To assist businesses, FinCEN provides a Small Entity Compliance Guide with step-by-step instructions, videos, webinars, and FAQs. Visit their website for more details.

Important Note: Beware of Scams

FinCEN does not send unsolicited requests for BOI information. Be cautious of any unexpected emails or calls asking for your business’s information.

Stay informed and compliant to avoid costly penalties and ensure your business operates smoothly under the CTA.