Mandatory Beneficial Ownership Information (BOI) Reporting: What You Need to Know

As a small business owner, you may have heard about the new mandatory Beneficial Ownership Information (BOI) reporting requirements. This information will answer your most pressing questions about BOI reporting, including what it is, who needs to file, and how to comply.

What is BOI Report and Who Needs to File?

The BOI report is a new requirement under the Corporate Transparency Act, designed to help prevent money laundering and other financial crimes. It requires certain businesses to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

Most small businesses are required to file a BOI report, including:

• Corporations

• Limited Liability Companies (LLCs)

• Limited Partnerships

• Business Trusts

Some business classifications are exempt from the BOI Report:

• Publicly traded companies

• Many nonprofits

• Certain financial institutions

• Businesses with more than 20 full-time U.S. employees, an operating presence at a physical U.S. office, and over $5 million in gross receipts

Why is Filing Mandatory?

Failing to comply with BOI reporting requirements can result in significant penalties such as the following:

• You will be fined $591 per day for every day the business is out of compliance

• Criminal penalties of up to $10,000 fine and/or two years of imprisonment

Wow!  I don't know about you, but I'm not trying to go broke, and I'm not built to serve time behind bars. Let's do whatever we can to meet those deadlines! Keep reading so that I can tell you how to dodge those bullets...

When is the Deadline for Filing the BOI Report?

The deadline for filing the BOI report depends on when your business was created or registered. Filing is FREE:

•  Businesses created before January 1, 2024 have a deadline of January 1, 2025

• Businesses created between January 1, 2024 and December 31, 2024 have 90 calendar days after creation or registration to file the report

• Businesses created on or after January 1, 2025 will have 30 calendar days after creation or registration

Are Filing Extensions Available?

Yes, extensions are available if you meet certain criteria. FinCEN has granted extensions for businesses affected by these recent natural disasters:

• Hurricane Milton: October 4, 2024, to January 2, 2025 (Florida)

• Hurricane Helene: September 22, 2024, to December 21, 2024 (Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia)

• Hurricane Francine: September 8, 2024, to December 7, 2024 (Louisiana)

• Hurricane Debby: July 31, 2024, to October 29, 2024 (Florida, Georgia, and Pennsylvania)

• Hurricane Beryl: July 4, 2024, to October 2, 2024 (Texas)

To qualify for these extensions, your business must be located in an area designated by FEMA for assistance and by the IRS for tax filing relief.

How Do You File the BOI Report and What Information is Needed?

BOI reports must be submitted through the FinCEN website at this link: https://boiefiling.fincen.gov/

The following information must be included in the BOI report:

Company Information:

• Legal name

• Trade names or "doing business as (DBA)" names

• Current street address

• Jurisdiction of formation or registration

• Taxpayer identification number

Beneficial Owner Information:

• Name

• Date of birth

• Residential address

• Identifying number from an acceptable identification document

• Image of the identification document

Also keep in mind that if your business was created or registered on or after January 1, 2024, you will also need to provide information about company applicants.

Summary

By staying informed and complying with BOI reporting requirements, you can ensure your small business remains in good standing and avoids potential penalties. Remember to consult with a legal professional if you have specific questions about your business's obligations. For more details about the report, penalties, and more, check out the FAQs: https://www.fincen.gov/boi-faqs

***Don't forget to come back and look at our Nacogdoches County MBD blog for more useful knowledge!***

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