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Introduction
The BOI Report (Beneficial Ownership Information Report) is a crucial requirement for enhancing corporate transparency in the United States. Established under the Corporate Transparency Act (CTA), the BOI report aims to combat illicit activities such as money laundering, tax evasion, and terrorist financing. This article will provide a comprehensive overview of the BOI report, its requirements, deadlines, and penalties, along with a special offer for businesses.
Understanding the BOI Report and the Corporate Transparency Act (CTA)
The Corporate Transparency Act (CTA), enacted on January 1, 2021, as part of the National Defense Authorization Act for Fiscal Year 2021, introduced the requirement for the BOI Report. This federal law was designed to address Congress’s concerns regarding the misuse of “shell companies” for various criminal activities.
The primary purpose of the BOI report is to collect detailed information about the beneficial owners of reporting companies. The Financial Crimes Enforcement Network (FinCEN) has established a platform for these companies to submit their BOI reports, which became operational on January 1, 2024. Consequently, millions of small businesses are now required to report their beneficial ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
Reporting Requirements for the BOI Report
The BOI Report must be submitted by:
- Domestic Reporting Companies: This includes corporations, limited liability companies, and any other entities created by filing a document with a secretary of state or any similar office in the United States.
- Foreign Reporting Companies: This includes entities, such as corporations and limited liability companies, formed under the law of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or any similar office.
Notably, there are 23 types of entities exempt from these reporting requirements. Therefore, it is essential to thoroughly examine the qualifying criteria to determine whether your company is exempt. For instance, an accounting firm registered in accordance with section 102 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212) qualifies for an exemption.
Filing Deadlines for the BOI Report
The submission deadlines are as follows:
- For companies registered before January 1, 2024: The initial BOI report must be submitted by January 1, 2025.
- For companies created or registered between January 1, 2024, and January 1, 2025: There is a 90-calendar day window after receiving either actual or public notice of the creation or registration’s effectiveness to file the initial BOI report.
- For companies created or registered on or after January 1, 2025: The initial BOI report must be filed within 30 calendar days of receiving actual or public notice.
f there is any change to the required information about your company or its beneficial owners in a beneficial ownership information report that your company filed, your company must file an updated report no later than 30 days after the date of the change.
Penalties for Non-Compliance
The penalties for failing to comply with BOI reporting requirements and for unauthorized disclosure or use of BOI are significant. Specifically, as of January 25, the penalties are $591 per day. These penalties were established when the Corporate Transparency Act (CTA) became law in 2021, although FinCEN’s regulations for the CTA only became effective recently.
Conclusion
In conclusion, the BOI report is an essential tool for promoting corporate transparency and combating financial crimes in the United States. Therefore, compliance with the new reporting requirements is critical to avoid severe penalties. Schedule a consultation with us today to ensure your company meets its reporting obligations.
Special Offer
We offer a unique opportunity for businesses transitioning to our services this year. All new clients will receive complimentary assistance with their BOI report. This offer ensures you are fully compliant with the Corporate Transparency Act’s requirements without any additional cost. Therefore, contact us now to take advantage of this special offer and ensure your company’s compliance with the BOI reporting requirements.
