BOI Reporting: What You Need to Know

As a business owner, staying compliant with evolving regulations is crucial. One such requirement is Beneficial Ownership Information (BOI) reporting, a rule under the recently passed Corporate Transparency Act (CTA). 

Here’s a comprehensive look at what BOI reporting entails, why it's necessary, the penalties for non-compliance, and how our solution, NCS BOI Filing, can help simplify the process.

What is BOI Reporting?

Beneficial owners are typically considered individuals who own 25% or more of the company or exert substantial control over it. BOI reporting mandates that certain companies disclose details about those who fit that definition to the Financial Crimes Enforcement Network (FinCEN). 

Why is BOI Reporting Required?

The primary goal of BOI reporting is to increase transparency in business ownership, making it more challenging for individuals to use shell companies for illicit purposes. By revealing who truly owns and controls a business, the CTA aims to deter money laundering, fraud, and terrorist financing.

"Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures," said Secretary of the Treasury Janet L. Yellen in a press release earlier this year.

Who Needs to File BOI Reports?

The requirement applies to "reporting companies," which include:

• Domestic Corporations and LLCs: Entities created by filing with a state office.
• Foreign Companies: Those registered to operate in the U.S.

Exemptions exist for certain organizations, such as large operating companies, public utilities, and financial institutions. View all 23 exempt entity types here.

What Information Must Be Reported?

When filing a BOI report, companies must provide:

• Company Information: Legal name, trade names, address, jurisdiction of formation, and taxpayer ID number.
• Beneficial Owner Information: Names, dates of birth, addresses, and ID numbers/images from acceptable identification documents.

Filing Deadlines

Timely filing is essential. Here are the key deadlines:

• Companies created before January 1, 2024: Must file by January 1, 2025.
• Companies formed in 2024: Have 90 days from formation to file.
• Companies formed in 2025 and later: Must file within 30 days of formation.

Penalties for Non-Compliance

Failing to comply with BOI reporting can lead to severe consequences. Willful violations may result in:

• Civil Penalties: Up to $591 per day.
• Criminal Penalties: Potentially up to 2 years of imprisonment.

How to File

Reports must be filed electronically through FinCEN's secure online filing system. This can be a complex process, especially for those unfamiliar with the requirements.

Our Solution: NCS BOI Filing

Understanding and navigating the BOI reporting requirements can be daunting. That’s where NCS BOI Filing comes in.

Our automated beneficial ownership reporting solution is designed to eliminate the risks and penalties associated with non-compliance. We streamline the process, ensuring that you have everything you need to file accurately and on time.

Many small businesses will soon need to collect and report ownership information to adhere to federal requirements. It’s crucial to determine if your company is subject to these rules and prepare to file by the applicable deadline. With NCS BOI Filing, you can ensure compliance without the hassle. Reach out to us today to learn more about how we can help!