Has your U.S. company filed its BOI Report? If not, you could be fined $591/day!
Beneficial Ownership Information (BOI) Reports must be filed by U.S. companies starting in 2024. Failure to file a BOI Report by the applicable deadline (see additional information below) may result in civil penalties of up to $591 per day, as well as criminal penalties of up to $10,000 and 2 years in prison. If you would like additional information about BOI reporting, or would like assistance filing your BOI Report, please contact CHY at info@chyaccounting.com.
What is a Beneficial Ownership Information (BOI) Report?
A BOI Report is a report that sets out information about the individuals who directly or indirectly own or control a company. A BOI Report requires the reporting company’s name, address, formation state, and federal taxpayer ID number. It also requires information on all beneficial owners of the company, including their full legal name, date of birth, current address, and identifying number (i.e., from a passport or driver’s license), along with an image of the document.
Where did the requirement to file a BOI Report come from?
The U.S. Corporate Transparency Act (CTA) was enacted by Congress as part of the 2021 National Defense Authorization Act. The CTA aims to enhance transparency in entity ownership to combat financial crimes. It requires certain businesses to report beneficial ownership information to the U.S. the Financial Crimes Enforcement Network (FinCEN).
Who needs to file a BOI Report?
Companies required to file a BOI Report are called reporting companies. There are two types of reporting companies:
1) Domestic reporting companies: Corporations, limited liability companies, S-Corps and any other entities created by the filing of a document with a secretary of state or any similar office in the United States; and
2) Foreign reporting companies: Entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the U.S. by the filing of a document with a secretary of state or any similar office.
There are 23 types of entities that are exempt from filing a BOI Report, including publicly-traded companies meeting specified requirements, many nonprofits, and certain large operating companies.
When are BOI Reports due?
The due date for filing a BOI Report depends on when the company was incorporated:
1) Existing companies, created or registered to do business prior to 2024, must file their BOI Report before January 1st, 2025;
2) New companies created or registered in 2024 have 90 days from their formation date to file their BOI Report; and
3) New companies created or registered in 2025 (or later) will have 30 days from their formation to file their initial BOI Report.
Note that BOI reporting is NOT a one-time requirement. An updated BOI Report must be filed any time that information previously reported to FinCEN, about the reporting company or its beneficial owners, changes. Updated BOI Reports must be filed within 30 days of a change to avoid fines.
What are the consequences of not filing a BOI Report?
Companies may violate the CTA by willfully failing to file a BOI Report, willfully filing a false BOI Report, or willfully failing to correct or update previously reported BOI Reports. Such violations may result in civil penalties of up to $500 (adjusted annually for inflation) for each day that the violation continues. As of the date of this publication, this equals $591 per day. Violates may also be subject to criminal penalties of up to 2 years in prison and a fine of up to $10,000.
Additional Information
If you would like additional information about BOI reporting, or would like assistance filing your BOI Report, please contact CHY at info@chyaccounting.com. You could also obtain further information by accessing the FINCEN website: Beneficial Ownership Information Reporting | FinCEN.gov.
This information is for educational purposes only and is not intended to be advice on any particular matter. No one should act on the basis of any matter contained in this blog post without considering appropriate professional advice. We expressly disclaim all liability in respect of anything done or omitted to be done wholly or partly in reliance upon the contents of this information.