BOI Reporting

Background on BOI Reporting

The Beneficial Ownership Information (BOI) reporting requirements were established under the Corporate Transparency Act (CTA), a law enacted as part of the Anti-Money Laundering Act of 2020. The goal of BOI reporting is to combat illicit financial activity by increasing transparency around the individuals who own and control legal entities. By requiring businesses to disclose this information to the Financial Crimes Enforcement Network (FinCEN), the government aims to deter money laundering, tax evasion, and other financial crimes.

These reporting requirements apply to most domestic and foreign entities registered to do business in the United States, including corporations, limited liability companies (LLCs), and similar entities. However, some entities—such as publicly traded companies, certain nonprofit organizations, and governmental entities—are exempt from the requirements.

Legal Challenges

When the BOI reporting requirements were initially introduced, they faced legal challenges, with critics arguing that they imposed unnecessary burdens on small businesses and violated constitutional rights. These challenges led to temporary uncertainty regarding enforcement. However, subsequent court rulings reaffirmed the validity of the BOI requirements, solidifying the government’s authority to mandate compliance. As a result, FinCEN has now set firm deadlines for submission and clarified the penalties for non-compliance.

Steps to Complete Your BOI Filing

Determine if Your Entity Must File

• General Requirement: Most domestic and foreign entities registered to do business in the U.S. are required to file. This includes corporations, limited liability companies (LLCs), and other entities created by a filing with a secretary of state or similar office.

• Key Factors: If your entity is a legal structure capable of owning property, entering contracts, or conducting business independently, it is likely subject to the BOI requirements.

• Exempt Entities: Some entities are exempt from the BOI reporting requirements, including:

  • Publicly traded companies registered under Section 12 of the Securities Exchange Act of 1934 or required to file reports under Section 15(d) of that Act.

  • Certain tax-exempt organizations, such as 501(c)(3) nonprofits.

  • Financial institutions, including banks, credit unions, and broker-dealers, already heavily regulated by other federal reporting requirements.

  • Governmental entities, including entities formed by federal, state, or local government.

  • Large operating companies meeting specific criteria (e.g., over 20 full-time employees, gross receipts exceeding $5 million, and a physical office within the U.S.).

• Clarify Your Status: If you are unsure whether your entity qualifies as exempt, consult with a legal professional to ensure compliance.

1. Gather the Required Information

   • Entity Information: Legal name, address, and Employer Identification Number (EIN).

   • Beneficial Owner Information: For each individual who owns at least 25% of the entity or exercises substantial control:

     • Full legal name

     • Date of birth

     • Residential address

     • Identification document (e.g., driver’s license or passport)

   • Company Applicant Information: Details of individuals involved in forming or registering the entity, if applicable.

2. Access FinCEN’s BOI Reporting Portal

   • Visit the FinCEN BOI Reporting Portal to submit your report.

3. Complete and Submit the BOI Report

   • Follow the instructions on the portal to input the gathered information.

   • Verify the accuracy of all details before submission.

4. Retain Proof of Filing

   • Save a copy of your submission confirmation for your records. You may need this for compliance audits or future filings.

Deadlines and Penalties

The BOI reporting deadline is January 13, 2025. Failure to file by this date may result in substantial penalties, including fines and other legal consequences.

Legal Repercussions for Non-Compliance

1. Civil Penalties: Entities that fail to comply with BOI reporting requirements may face civil fines of up to $500 per day until the violation is corrected.

2. Criminal Penalties: Intentional or willful failure to comply, or filing false information, may result in criminal penalties, including fines of up to $10,000 and/or imprisonment for up to two years.

3. Loss of Good Standing: Non-compliant entities may lose their good standing status, affecting their ability to conduct business or maintain licenses.

Ensuring timely compliance is critical to avoid these repercussions.

How We Can Help

At Ament Law Group, P.C., we understand that navigating compliance requirements can be daunting. We offer assistance with BOI filings to help ensure your compliance with both federal and state laws. For a nominal fee, we can handle the filing on your behalf. Please contact us at the button below and one of our attorneys will reach out to assist you with the filing process.