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Get Ready for BOI Reporting on Jan 1: Find Out if Your Company Must File

By Jamee N. Bollinger, CPA

November 14, 2024

Attention business owners – It’s time to begin reviewing regulations and identifying your company’s beneficial owners for filing your Beneficial Ownership Information Reports (BOIR). BOIR filings are due January 1, 2025, for the vast majority of small and medium-sized businesses that file a form with any Secretary of State’s office.

BOIR filings have been a requirement since the passing of the Corporate Transparency Act (CTA), a federal law initially passed in 2021 that requires domestic and foreign companies (and LLCs) to report to the Financial Crimes Enforcement Network (FinCEN); FinCEN is a bureau of the US Department of the Treasury that works to detect and prosecute financial crimes.

Ultimately, the purpose of the reporting is to disclose information about beneficial owners to make it more difficult for criminals to hide ownership of companies and/or use companies to launder money or finance illegal activities.

Prepare for what’s ahead by getting the answers to some of the most common questions.

Who is Required to Report?

Businesses that file forms with any Secretary of State office are subject to the CTA’s BOIR requirements—specifically, any legal entity that files with the Secretary of State, such as corporations, LLCs, single-member LLCs, or foreign corporation LLCs.

Business entities that are excluded from this reporting requirement include:

  • General partnerships, if not required to register with the Secretary of State.
  • Large operating companies that meet all 3 of these requirements:
    1. 20 or more full-time employees in the US
    2. Over $5 Million in Gross Revenues
    3. Physical Office in the US

Additional exemptions may apply based on some regulated industries. Find out more specific information on exemptions here.

What Gets Reported?

A list of “beneficial owners” that have:

  • 25% or more ownership
  • Individuals deemed to have “substantial control” – this includes senior executives and potentially other key positions of control depending on circumstances.

Each beneficial owner needs to provide the following personal information:

  1. Name / Date of Birth / Current residential physical address
  2. Government-issued ID number, and
  3. A picture of a passport, driver’s license, or other government-issued ID 

When Should Companies File?

  • Companies in existence prior to January 1, 2024, should file an initial report by January 1, 2025 (12-month window).
  • Companies formed on or after January 1, 2024, should file an initial report within the first 90 days after formation.
  • Companies formed on or after January 1, 2025, should file an initial report within the first 30 days after formation.
  • Updated Filings are required within 30 days of the following events:
    • Changes in ownership or control
    • Becoming aware of a correction needed for a previous report

Where and How Are These Reports Filed?

BOIRs must be filed electronically through the FinCEN website here: https://boiefiling.fincen.gov/.

Why Should You File?

Non-compliance with the Corporate Transparency Act can lead to severe penalties. Late filing of the BOIR may incur civil and criminal penalties.

Beyond these penalties, companies may face challenges such as difficulty securing financing, a heightened risk of regulatory audits, reputational harm, and trouble attracting customers and employees. To ensure compliance, your business should establish a process for identifying and reporting beneficial owners.

If your company meets the criteria, you need to file this BOIR as outlined above to avoid penalties.  Strict enforcement is expected. Penalties include:

  • Civil Penalties of up to $591 per day for noncompliance.
  • Criminal Penalties: Willful violations can lead to criminal penalties, including fines of up to $10,000 and imprisonment for up to two years.
  • Penalties can be avoided by correcting any errors on a filed report within 90 days.

Who Can Assist Me in Filing?

You can file your BOIR yourself, or you can have your attorney handle it for you. If your attorney has indicated that they won’t be assisting you with this, please consider reaching out to your accountant. We can also provide you with a referral source if needed.

Get in Touch

As your professional advisors, we are here as a resource to inform and remind you of the most important filing deadlines. However, if you have access, you may also consult your legal counsel or your business attorney for advice.

Grimbleby Coleman Advisors & Accountants does not file these reports, but we are happy to help direct you to the resources needed to complete your filings. Contact us for questions about this article.