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BOI Filing Made Easy: Step-by-Step Instructions

Learn how to complete BOI filing step-by-step. Understand deadlines, penalties, and who needs to file. NR CPAs and Business Advisors simplifies the process.

Simplifying BOI Filing: What You Need to Know

Navigating the complexities of BOI filing might seem daunting, but it’s crucial for ensuring compliance with the Corporate Transparency Act (CTA). The CTA mandates that companies disclose their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) to combat illicit activities like money laundering and terrorism financing.

If you’re new to this, here’s what you must remember:

  • Existing Companies: File your report by January 1, 2025.
  • New Companies: File within 90 days of creation or registration.
  • Updates: Report changes within 30 days.

At NR CPAs and Business Advisors, we recognize how overwhelming this can be. I’m Nischay Rawal, with over a decade of experience in the industry. My firm specializes in making complex financial regulations manageable for small business owners like you.

Let’s dive into the essentials of BOI filing—which beneficial ownership information you need, and why it’s crucial.

BOI Filing Requirements - boi filing infographic pillar-5-steps

What is BOI Filing?

BOI stands for Beneficial Ownership Information. This is information about who actually owns or controls a company. The goal is to increase transparency and prevent financial crimes like money laundering and fraud.

The Corporate Transparency Act

The Corporate Transparency Act (CTA), effective January 1, 2024, requires many U.S. companies to report their beneficial owners to FinCEN (Financial Crimes Enforcement Network). This is part of the U.S. Department of the Treasury’s efforts to curb illegal activities.

What is a Beneficial Owner?

A beneficial owner is someone who directly or indirectly owns or controls at least 25% of a company. This could be through shares, voting rights, or other means of control. Knowing who these people are helps authorities track and prevent misuse of companies.

Why is BOI Important?

  1. Prevents Financial Crimes: By knowing who owns a company, it’s harder for criminals to hide behind complex ownership structures.

  2. Transparency: Helps businesses and governments understand who they are dealing with, reducing risks.

  3. Compliance: Financial institutions and other entities need this information to comply with laws on sanctions, terrorist financing, and more.

FinCEN’s Role

FinCEN is the bureau responsible for collecting and safeguarding BOI. They have created a secure system for companies to submit their information electronically.

Key Points from the Research

  • Who Needs to File? Most U.S. companies, except for sole proprietors and certain exempt entities like publicly traded companies and some nonprofits.

  • Deadlines: Existing companies have until January 1, 2025, to file. New companies formed in 2024 have 90 days, and those formed after 2024 have 30 days to file.

  • Penalties: Failure to comply can result in severe penalties, including fines up to $10,000 and imprisonment.

Financial Crimes Enforcement Network - boi filing

Understanding BOI filing is crucial for compliance and avoiding penalties. In the next section, we’ll walk you through the step-by-step process of filing your BOI report.

Who Needs to File a BOI Report?

If you’re wondering whether your company needs to file a Beneficial Ownership Information (BOI) report, you’re not alone. Here’s a simple breakdown of who needs to file, who doesn’t, and the important deadlines you need to know.

Reporting Companies

Any company created in the United States by filing a document with a state or tribal office must file a BOI report. This includes:

  • Corporations
  • Limited Liability Companies (LLCs)
  • Limited Partnerships (LPs)
  • Business Trusts

Foreign companies registered to do business in the U.S. also need to file.

Note: Sole proprietors do not need to file, even if they have a DBA or an EIN.

Exemptions

Not all companies need to file a BOI report. There are 23 types of exempt entities, including:

  • Large Operating Companies: Must have more than 20 full-time U.S. employees, over $5 million in annual revenue, and a physical office in the U.S.
  • Publicly Traded Companies
  • Banks and Credit Unions
  • Governmental Entities
  • Tax-Exempt Nonprofits

For a full list of exemptions, refer to the FinCEN website.

Small Businesses

Small businesses, unless exempt, are required to file a BOI report. This includes single-member LLCs, partnerships, and other corporate structures.

Important: If your business involves complex structures like trusts or foundations, consult the FinCEN FAQ or a legal professional to determine your filing requirements.

Deadlines

Deadlines vary depending on when your company was formed:

  • Existing Companies: Formed before January 1, 2024, must file by January 1, 2025.
  • New Companies in 2024: Have 90 days from the date of formation to file.
  • Companies Formed After 2024: Must file within 30 days of formation.

Changes: If any BOI changes, you have 30 days to update your report.

Understanding who needs to file is the first step to compliance. Next, we’ll guide you through the step-by-step process of BOI filing.

Step-by-Step Instructions for BOI Filing

Navigating the process of BOI filing might seem daunting, but breaking it down into simple steps can make it much easier. Here’s how to get it done:

Step 1: Gather Required Information

Before you start, you need to collect specific details about the beneficial owners of your company. Here’s what you’ll need:

  • Full Legal Name: Ensure the name is exactly as it appears on official documents.
  • Date of Birth: The exact date of birth of each beneficial owner.
  • Current Address: This can be a residential or business address.
  • Identification Number: This can be from a non-expired U.S. driver’s license, U.S. passport, or another state/local government-issued ID. If these aren’t available, a non-expired foreign passport will work.
  • Document Image: A clear image of the identification document you use.

Step 2: Prepare Your Report

Once you have all the required information, you’re ready to prepare your Beneficial Ownership Information Report (BOIR):

  • BOIR Form: You can fill out the form online or download a PDF version to complete offline. Make sure you have Adobe Acrobat if you choose the PDF method.
  • Online Filing: Using the online form might save time, but be cautious as there’s no verification step before submission. Double-check your entries.
  • Offline Preparation: If you prefer, prepare the form offline and then upload it to the FinCEN website. This method allows for careful review before submission.

Step 3: Submit Your Report

Submitting your report is straightforward, but it’s important to follow the correct steps to ensure compliance:

  • Access BOSS: Visit the FinCEN website and navigate to the Beneficial Ownership Secure System (BOSS) portal.
  • Complete the Form: Enter all the required details for beneficial owners and your company.
  • Upload Document Images: Attach clear images of the identification documents.
  • Review and Submit: Double-check all information for accuracy before hitting the submit button. Filing is free, and the process is designed to be secure.

Step 4: Update or Correct Information

Keeping your BOI report up-to-date is crucial to avoid penalties:

  • Corrections: If you realize there’s an error in your submitted report, you must file a correction. This can be done through the same BOSS portal.
  • Updates: Any changes to your beneficial ownership information, including address changes, must be reported within 30 days.
  • Penalties for Non-Compliance: Failing to file, filing false information, or not updating changes can lead to severe penalties. Civil penalties can be up to $591 per day, and criminal penalties can include fines up to $10,000 and up to two years imprisonment.

Following these steps will help ensure your BOI filing is accurate and timely, keeping your company in compliance with the Corporate Transparency Act. Next, we’ll discuss the deadlines and penalties in more detail.

Deadlines and Penalties

Understanding the deadlines and penalties for BOI filing is crucial to ensure your company stays compliant and avoids hefty fines or legal issues.

Filing Deadlines

  1. Existing Companies:
  2. If your company was formed before January 1, 2024, you have until January 1, 2025, to file your initial BOI report.

  3. New Companies:

  4. Companies formed in 2024 must file within 90 days of formation.
  5. Companies formed in 2025 or later have only 30 days to file after formation.

  6. Updates:

  7. Any changes to the beneficial ownership information must be reported within 30 days of the change.

Penalties for Non-Compliance

Failing to comply with BOI filing requirements can result in significant penalties:

  1. Civil Penalties:
  2. Up to $500 per day for not filing or for filing inaccurate information, with a maximum of $10,000.

  3. Criminal Penalties:

  4. Intentional non-compliance or providing false information can lead to fines up to $10,000 and imprisonment for up to two years.

  5. Enhanced Penalties:

  6. Repeat offenders or those who willfully evade the requirements may face even higher fines and longer imprisonment terms.

Compliance

To avoid these penalties, follow these steps:

  1. File Early:
  2. Don’t wait until the last minute. Filing early can help you avoid the rush and potential mistakes.

  3. Correct Inaccuracies:

  4. If you discover any inaccuracies, correct them within 90 days to benefit from the safe harbor provision, which protects you from penalties if you act promptly.

  5. Stay Informed:

  6. Keep up with any updates or changes in the regulations. FinCEN’s website is a good resource for the latest information.

  7. Plan Ahead:

  8. If you manage multiple entities, create a plan to ensure all are filed on time. Missing the deadline can lead to severe consequences.

By adhering to these deadlines and compliance steps, you can avoid the headaches and penalties associated with non-compliance. Next, we’ll tackle some frequently asked questions about BOI filing to help clarify any remaining doubts.

Frequently Asked Questions about BOI Filing

What is a BOI filing?

BOI filing stands for Beneficial Ownership Information filing. It involves reporting details about the individuals who own or control a company. This information is submitted to FinCEN, the Financial Crimes Enforcement Network. The goal is to prevent financial crimes like money laundering by making ownership structures more transparent.

Beneficial owners are those who own at least 25% of a company or have substantial control over it. This includes senior officers and individuals who can appoint or remove senior officers.

Who needs to file a BOI in 2024?

Most companies created or registered in the U.S. need to file a BOI report. This includes:

  • Domestic Reporting Companies: Entities formed by filing documents with a state or tribal office.
  • Foreign Reporting Companies: Entities formed abroad but registered to do business in the U.S.

Exemptions exist for certain entities, like large operating companies with more than 20 full-time employees, over $5 million in annual revenue, and a physical office in the U.S. Other exempt entities include publicly traded companies, banks, and credit unions.

Deadlines:
Existing Companies: Must file by January 1, 2025.
New Companies (formed in 2024): Have 90 days from formation to file.
New Companies (formed in 2025 or later): Have 30 days from formation to file.

How to file a BOI report in Texas?

Filing a BOI report in Texas follows the same general steps as in other states, but there are some specifics to keep in mind:

  1. Gather Required Information:
  2. Beneficial Owners: Name, date of birth, address, and identification documents.
  3. Company Information: Legal name, principal business address, and any trade names.

  4. Prepare Your Report:

  5. Fill out the BOIR form. You can do this online at the FinCEN website or download a PDF form to complete offline.

  6. Submit Your Report:

  7. Access the Beneficial Ownership Secure System (BOSS) on the FinCEN website.
  8. Enter the required details and upload identification documents.
  9. Review all information for accuracy before submission.

  10. Update or Correct Information:

  11. If there are changes to your beneficial ownership information, update your report within 30 days to avoid penalties.

Online Filing:
– Use the FinCEN website’s secure portal to submit your BOIR form electronically.

Offline Preparation:
– Download the PDF form, fill it out using Adobe Acrobat, and then upload it through the BOSS portal.

By following these steps, you can ensure your BOI filing is accurate and on time, avoiding penalties and staying compliant with the Corporate Transparency Act.

Next, we’ll discuss the importance of compliance and the resources available to help you through the BOI filing process.

Conclusion

Importance of Compliance

Staying compliant with the Corporate Transparency Act (CTA) is crucial for every business. Failure to file your Beneficial Ownership Information (BOI) report can result in hefty penalties, including fines of up to $10,000 and even imprisonment for up to two years. Non-compliance can also damage your business’s reputation and hinder your ability to secure funding.

NR CPAs and Business Advisors

At NR CPAs and Business Advisors, we understand that navigating the complexities of BOI filing can be daunting. Our team of experts is here to help you file your BOI report accurately and on time. We offer comprehensive tax and compliance services to ensure that you meet all regulatory requirements without the stress.

Resources for Small Businesses

We provide a range of resources to assist small businesses with BOI filing:
Step-by-Step Guides: Easy-to-follow instructions to help you gather, prepare, and submit your BOI report.
Consultation Services: Personalized advice from our experienced CPAs and Enrolled Agents.
Compliance Updates: Regular updates on any changes in BOI filing requirements and deadlines.

By leveraging our expertise, you can focus on what you do best—running your business—while we take care of the compliance details.

Don’t wait until the last minute. Contact NR CPAs and Business Advisors today to ensure your BOI filing is handled smoothly and efficiently.

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