What is BOI reporting?

BOI Reporting

What is BOI reporting?

BOI Reporting

BOI Reporting refers to the process of disclosing the identities of individuals who directly or indirectly own or control a significant portion (typically 25% or more) of a business. The Beneficial Ownership Information (BOI) Report is crucial for increasing transparency and preventing illicit activities such as money laundering, tax evasion, and financing terrorism. By filing a BOI report, businesses help regulators and authorities track and understand who truly controls or benefits from the business, ensuring compliance with laws and regulations.
Failing to file a BOI report can result in significant penalties, including fines and legal consequences. Penalties may include financial sanctions, and in severe cases, individuals responsible for non-compliance could face criminal charges. It is essential for businesses to file accurate and timely BOI reports to avoid these penalties and maintain regulatory compliance.

The monetary penalties for failing to file a BOI report can vary depending on the jurisdiction and specific regulations. However, under the U.S. Corporate Transparency Act (CTA), for example:

Civil Penalties:
- A fine of up to $500 per day for each day the violation continues, starting from the day after the BOI report was due.
Criminal Penalties:
- Willful failure to file, or providing false information, can lead to fines up to $10,000.
- Additionally, individuals could face imprisonment for up to 2 years.

These penalties underscore the importance of timely and accurate BOI reporting to avoid substantial financial and legal consequences.

Entities required to file a Beneficial Ownership Information (BOI) report generally include:

Corporations: Domestic and foreign corporations registered to do business.
Limited Liability Companies (LLCs): Domestic and foreign LLCs registered to do business.
Other Legal Entities: Certain partnerships, trusts, and similar entities.

Exemptions:

Large operating companies with more than 20 full-time employees, over $5 million in annual revenue, and a physical office in the U.S.
Regulated entities like banks, insurance companies, and publicly traded companies.
Nonprofit tax-exempt 501c3 organizations

For corporations and LLC formed prior to January 2021 For LLCs and corporations formed before January 1, 2021, the deadline to file a Beneficial Ownership Information (BOI) report is January 1, 2025. This provides a two-year window from the effective date of the BOI reporting requirements in 2024 for these existing entities to comply.

Entities created after January 1, 2024, will need to file their BOI reports within 90 days of their formation or registration.
Entities created after January1, 2025, will need to file their BOI reports within 30 days of their formation or registration.

CNH & Associates can assist in filing your BOI Report to become compliant for your company or corporation. Click here to start your filing process. Cost only $110.