Things Business Owners Should Be Aware of Before Year-End: BOIR

As we approach the end of the year, it’s important for business owners to make sure they’re in compliance with all regulatory requirements. One critical update you should be aware of is the Beneficial Ownership Information Reporting (BOIR), which stems from the Corporate Transparency Act (enacted in 2021). If you haven’t filed your report yet, this is your reminder to do so before the deadline!

What is BOIR?

The Corporate Transparency Act (CTA) was passed to enhance transparency around who owns and controls companies, with the goal of combating illegal activities like money laundering and tax fraud. To enforce this, BOIR requires certain entities to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

The deadline for compliance is fast approaching, and failure to report could result in significant penalties, so it’s critical to ensure your business has filed before year-end if you haven’t already.

Who Needs to File?

Both domestic and foreign entities that are formed under the law of a state or Indian tribe are required to file. This includes most LLCs, corporations, and other legal business structures.

Who is Exempt?

There are 23 exemptions for certain companies, including:

• Large companies that meet specific criteria
• Tax-exempt entities
• Inactive entities
• Most sole proprietors

Make sure to review the exemption list to see if your business qualifies. Otherwise, you’ll need to file.

Where and When to File?

You can file your BOIR report through FinCEN at https://boiefiling.fincen.gov/fileboir.

The deadline depends on when your business was created:

• If your company was created before January 1, 2024, you must file by January 1, 2025.
• For companies created in 2024, the report must be filed within 90 days of formation.
• For companies formed after January 1, 2025, you must file within 30 days.
• Any changes to the business’s beneficial ownership must also be reported within 30 days of the change.

Key Definitions to Know Before Filing

• Reporting Company: The entity required to report beneficial ownership information to FinCEN (unless exempt).
• Beneficial Owner: Any individual who either directly or indirectly exercises substantial control over the reporting company or owns at least 25% of the company.
• Applicant: The individual who creates or registers the company. For companies created after January 1, 2024, you will need to provide information on up to two individuals who acted as the applicant.

What Do You Need to File?

Before filing, gather the following information:

• Reporting company details: legal name, DBA, address, state of formation, and TIN
• Beneficial owner details:
  • Full name, date of birth, address
  • Identifying number from a driver’s license, passport, or another ID
  • Copy of the document containing the identifying number

Don’t Delay – File Before It’s Too Late!

Business owners who fail to comply with the BOIR requirements by the deadline may face substantial penalties. Filing is a straightforward process, but it’s important to get it done in a timely manner. If you have any questions or need assistance with filing, contact us today.

Stay tuned for more in our “Things Business Owners Should Be Aware of Before Year-End” series!