Business owners across the United States may be shocked to hear that they are required to file a new mandatory report with the US Department of Revenue. Treasury from 2024 onwards. While businesses that existed before 2024 have until the end of the year to submit this report, new businesses starting in 2024 only have a few days to submit.

Penalty for not showing up? A hefty fee that can add up to $500 a day in fines.

In 2021, Corporate Transparency Act was signed into law, a bipartisan bill that created a new reporting requirements for businesses to declare their beneficial ownership information. The new Beneficial Ownership Information (BOI) report stores beneficial owner information in a secure private database “as part of the US government's efforts to make it more difficult for bad actors to hide or profit from their illicit gains through shell companies or other shady ownership structures.”

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How can I determine if my company is required to file a BOI report?

There are two categories for companies that are required to report: domestic reporting companies and foreign reporting companies. Native companies are those that have formed their company under the laws of the United States, both state laws and Native American tribal laws. If the company is formed by filing a document with the US Secretary of State or a similar office under the law of a Native American tribe, then that company will be a reporting company unless they have an exemption. Similarly, if a foreign company is registered by filing a document with the US Secretary of State or a similar office of a Native American tribe, they are also a reporting company.

Are any types of business exempt from registration?

There are some types of businesses that are not required to file a BOI report. FinCEN Compliance Guide includes the following types of businesses on their list of those exempt from registration:

• Issuer of reporting securities
• Governmental authority
• Bank
• Credit Union
• The holding company of the depository institution
• Money services business
• Securities broker or dealer
• Securities exchange or clearing agency
• Other entity registered in the Exchange Act
• An investment company or investment adviser
• Venture capital fund advisor
• The insurance company
• State Licensed Insurance Producer
• Subject registered in the Commodity Exchange Act
• Accounting firm
• Public services
• Financial market services
• Pooled investment vehicle
• Tax exempt entity
• Entity assisting a tax-exempt entity
• Large operating company
• Affiliate of certain exempt entities
• Inactive subject

I'm a sole proprietor, do I need to file?

No, in most cases, sole proprietors are not required to file a BOI report UNLESS they have filed a document with the Secretary of State's office. Registering a 'Doing Business As' (DBA) or fictitious business name, obtaining an IRS Employer Identification Number (EIN), obtaining a seller's permit or registering for a business license BEN NO make you a reporting company.

I am a single member LLC. Do I have to file?

In most cases, yes. If you are a single-member LLC, you must file a BOI report unless you are a listed exempt company (see above). BECAUSE Ltd you are required to register with the Secretary of State, you are determined to be a reporting company, and you are required to file a BOI report, unless you are listed as exempt.

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Where and how often do I file?

The BOI report is filed using FinCEN's BOI e-filing websitewhich began accepting reports in January 2024. The BOI report is filed once and updated when you have a change in your company information

When should businesses file?

FinCEN says:

“FinCEN began accepting reports on January 1, 2024.
• If your company was created or registered before January 1, 2024, you will have
until January 1, 2025, to report to the BOI.
• If your company was established or registered in 2024, you must report the BOI within 90
calendar days after receiving the actual or public notice of your company's creation
or registration is effective, whichever is earlier.
• If your company was formed or registered on or after January 1, 2025, you must file
BOI within 30 calendar days after receiving actual or public notice of its creation
or registration is effective.
• Any updates or corrections to beneficial ownership information that you
previously filed with FinCEN must be submitted within 30 days.”

Information from BOI information brochure, updated April 2024.

Does it cost anything to submit my BOI report?

There is no fee associated with submitting your BOI report. Note that some third-party organizations may offer to professionally file this report for you on your behalf and charge a fee for their services. However, the BOI report can be filed directly in FinCEN's online reporting system at no charge.

What happens if I don't file a BOI report?

If you fail to file your BOI report and willfully violate the reporting requirement, you will be subject to civil penalties of up to $500 per day for the duration of the violation (adjusted for inflation) and may also be subject to criminal penalties, including up to two years in prison along with a fine of up to $10,000.