The Beneficial Ownership Information Report (BOIR) is a vital filing requirement for small businesses, introduced to enhance financial transparency and combat illicit activities such as money laundering and tax evasion. If you’re a small business owner, understanding this filing is essential to stay compliant with federal regulations.
What Is the BOIR?
The BOIR is a federal report mandated by the Corporate Transparency Act (CTA). This law requires many businesses to disclose their beneficial ownership information, which includes identifying the individuals who own or control the business.
Beneficial owners are defined as individuals who meet any of the following criteria:
Own 25% or more of the company’s equity.
Exercise substantial control over the company’s operations.
Hold key decision-making roles, such as directors or officers.
The purpose of this report is to prevent anonymity in company ownership, which has historically been used to hide fraudulent activities.
Who Must File the BOIR?
Most U.S. small businesses, including LLCs, corporations, and similar entities, must file the BOIR.
However, certain entities are exempt, including:
Publicly traded companies.
Non-profit organizations.
Certain regulated entities, such as banks or insurance companies.
If your business is a small, privately held entity with no exemption status, you are required to file.
Filing Deadlines:
The deadlines for filing the BOIR depend on when your business was created:
For businesses formed on or after January 1, 2024:
You must file your BOIR within 30 days of registration with your state.
For existing businesses formed before January 1, 2024:
The deadline to file is January 1, 2025.
How to File the BOIR:
Filing the BOIR is a straightforward process. The Financial Crimes Enforcement Network (FinCEN) oversees the submission of these reports. Here’s how you can file:
Visit the FinCEN BOIR Portal
The official filing is done through the FinCEN BOIR Portal HERE.
Prepare Your Information
You’ll need the following details for each beneficial owner:
Full legal name
Date of birth
Address
Unique identification number (e.g., driver’s license, passport) and the issuing jurisdiction.
Submit Your Filing
Follow the online prompts to enter your data and complete the filing. FinCEN will provide a confirmation once the submission is successful.
Why Compliance Matters:
Non-compliance with the BOIR filing requirements can result in severe penalties, including:
Fines of up to $500 per day for late filings.
Criminal penalties of up to $10,000 and potential imprisonment for willful non-compliance.
Beyond penalties, ensuring your BOIR is filed accurately and on time protects your business from unnecessary legal complications.
Practical Tips for Small Business Owners:
Stay Organized:
Maintain up-to-date records of all beneficial owners. This will simplify the BOIR filing process and ensure accuracy.
Set Reminders:
Mark your calendar to avoid missing filing deadlines, particularly if your business is newly formed.
Leverage Professional Help:
Consider consulting with your attorney and CPA or financial advisor to navigate the BOIR requirements. An attorney's expertise can help you file correctly and efficiently.
Utilize QuickBooks Tools:
If you use QuickBooks or similar accounting software, you can track ownership and financial data seamlessly, which can aid in gathering BOIR information.
Filing your BOIR is a crucial step in maintaining compliance with federal regulations. By understanding who must file, adhering to deadlines, and utilizing the FinCEN portal, you can avoid penalties and focus on growing your business. Stay proactive, organized, and informed to meet your obligations with confidence.
For more resources, visit the FinCEN website or consult with your financial advisor today.
About the Author
Cherie Sayban is a certified public accountant. She has over 25+ years of experience in Finance, Accounting and Bookkeeping.
Cherie Sayban CPA provides various financial and accounting solutions to small and mid-size businesses. Our portfolio includes: tax preparation, payroll preparation, accounts receivable and payables, general ledger, and QuickBooks . Our bookkeeping workshops are offered both in-person and virtually.
To learn more about how Cherie Sayban CPA can help you and your business, click HERE
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