What Every Business Owner Needs to Know About Beneficial Ownership Information (BOI) Reporting

In the ever-changing landscape of business regulations, staying compliant is more important than ever. A critical new requirement that all business owners should be aware of is Beneficial Ownership Information (BOI) reporting. Designed to enhance transparency and combat financial crimes, BOI reporting will soon be mandatory for many businesses. Here’s everything you need to know, from who needs to file and the deadlines to the penalties for non-compliance and how this affects your business.

What Is BOI Reporting?

BOI reporting requires businesses to disclose detailed information about their beneficial owners. A beneficial owner is defined as anyone who:

• Owns or controls 25% or more of the company.
• Exercises substantial control over the company’s operations or decisions.
• Benefits significantly from the company’s activities.

The regulation is part of the Corporate Transparency Act (CTA) and aims to prevent illicit activities like money laundering, tax evasion, and terrorism financing. By requiring transparency about who truly owns and controls a company, the government can hold individuals accountable for any illegal actions.

Who Governs BOI Reporting?

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, oversees BOI reporting. FinCEN is tasked with securely collecting, storing, and managing beneficial ownership data. The information will be accessible only to authorized government agencies for investigations and enforcement purposes.

What Business Types Need to File?

BOI reporting applies to most businesses formed or registered in the United States, including:

• Corporations
• Limited Liability Companies (LLCs)
• Partnerships
• Other similar entities created by filing a document with a state or tribal government

Essentially, if your business is formally registered, it’s likely subject to BOI reporting requirements.

What Business Types Do Not Need to File?

Certain types of entities are exempt because they are already subject to rigorous oversight or deemed to pose a low risk for misuse. Exempt entities include:

• Publicly Traded Companies: Already report ownership to the SEC.
• Government-Owned Entities
• Large Operating Companies: Defined as having 20 or more full-time employees, more than $5 million in annual revenue, and a physical office in the United States.
• Nonprofits
• Banks, Credit Unions, and Insurance Companies
• Registered Investment Companies and Advisors

What Information and Documents Are Required?

To file BOI reports, businesses must collect and submit the following information for each beneficial owner:

1. Full Legal Name
2. Date of Birth
3. Residential Address
4. Unique Identifying Document (e.g., passport, driver’s license) and an image of the document.

Additionally, businesses must report details about the entity itself, including:

• Legal Name of the Business
• Primary Business Address
• State or Tribal Jurisdiction of Formation
• Employer Identification Number (EIN)

Having these documents and details ready will streamline the filing process and reduce the risk of errors or delays.

What Are the Deadlines for Filing?

Deadlines for BOI reporting depend on when your business was formed:

• New Businesses (formed after January 1, 2024): Must file their BOI report within 30 days of formation or registration.
• Existing Businesses (formed before January 1, 2024): Must file their initial BOI report by January 1, 2025.

Any changes to beneficial ownership or company information must also be updated within 30 days of the change.

What Are the Penalties for Non-Compliance?

Failure to comply with BOI reporting requirements can result in severe penalties:

• Civil Penalties: Up to $591 per day for each day the violation continues.
• Criminal Penalties: Fines up to $10,000 and/or imprisonment for up to two years for willful violations.

Non-compliance isn’t just a financial risk—it can damage your business’s reputation and credibility with partners, customers, and regulatory bodies.

How Does BOI Reporting Affect Your Business?

BOI reporting can have several implications for your business:

1. Increased Administrative Burden: Collecting, verifying, and maintaining ownership information adds another layer of compliance work.
2. Ongoing Monitoring: Businesses must update their filings promptly whenever there is a change in ownership or control.
3. Data Sensitivity: Managing sensitive information about beneficial owners requires robust data protection measures.
4. Potential Operational Impact: Non-compliance or errors in reporting can lead to disruptions, fines, and reputational harm.

Staying on top of these requirements is essential to avoid penalties and maintain trust with stakeholders.

How Siegel Solutions Can Help

Navigating the complexities of BOI reporting doesn’t have to be overwhelming. Siegel Solutions is here to simplify the process and ensure your business is fully compliant. Here’s how we can help:

• Determine Filing Requirements: We’ll evaluate your business to confirm if you need to file and whether any exemptions apply.
• Prepare and File Reports: We’ll collect and verify the necessary information and submit your BOI report to FinCEN accurately and on time.
• Ongoing Compliance Support: We’ll help you manage updates and ensure future filings are handled smoothly.

Our team is committed to providing personalized support tailored to your business needs, saving you time and reducing stress.

Call to Action: Partner with Siegel Solutions Today

Don’t let BOI reporting deadlines or complexities catch you off guard. Avoid the risk of penalties and ensure compliance with the help of Siegel Solutions.

Call us today at781-487-7000 or by email at [email protected] Let us handle your BOI reporting so you can focus on running and growing your business with confidence!