You’ve probably been hearing a lot about the new reporting requirement for entrepreneurs and small business owners that went into effect January 1, 2024.
Let’s get right to it and start by clearing the air:
This is a simple, straightforward, easy report to file. It took me approximately 15 minutes from start to finish to complete. I can finish a margarita in that time, so I know this isn’t long!
HOWEVER, it is worth noting that the fees are not filing are astronomically high. We’re talking $500 PER DAY. So if you’re reading this, open up another browser and get it done now!
Below is a general FAQ so you know what this is and how (and if!) it impacts your business. If you know you need to file, you can skip down to our step by step instructions here.
The BOI is a new report that is a part of the Corporate Transparency Act (CTA) . It states that certain entities are now required to report information about beneficial owners to the US Treasury’s Financial Crimes Enforcement Network (FinCEN) Department.
The short answer: It’s just a form that says who the beneficial owners are and who started the company.
This new requirement is a part of the 2021 Corporate Transparency Act (CTA) to crack down on illegal activities, like money laundering. It aims to close the gap in knowing who owns or benefits from certain businesses in the United States. As long as you’re not committing crimes, the only thing you need to be worried about is making sure that you’ve filed the report to avoid the hefty fines for noncompliance.
The short answer: The government wants to know who exactly owns legal entities to make it easier for them to investigate crimes.
A beneficial owner is someone who owns more than 25% of the business or exercises substantial control over the entity. This includes owners AND officers (like CEOs, CFOs or Presidents) even if they don’t have ownership in the entity.
Domestic (or foreign) Corporations, LLCs or entities formed under laws (by legally filing registration paperwork). There are several types of entities that are exempt from filing a BOI (23 to be exact!). Most notably are sole proprietorships, but the full list of exemptions can be found here.
The short answer: Most small to midsize LLCs are required to file. When in doubt, report.
This depends on when you formed your business! If you have an existing business (was formed before 2024), then you have a full year to file! If you’re a new business in 2024, then you’re required to report within 90 days of formation.
The short answer: Formed after January 1, 2024 = Within 90 days of formation.
Formed before January 1, 2024 = Due by January 1, 2025
There is a chance your accountant may do this, but it is a case by case scenario. Here at The Easterday Group, we are not offering this for clients, although we are sending out several reminders to our clients so they don’t incur any fees.
It’s free! Yay! BUT, there are BIG TIME penalties for those that don’t file on time.
The penalties for filing late are astronomical. The fees are $500 PER DAY, with no-cap. OUCH.
The short answer: DO NOT FILE LATE.
Get started by heading to https://www.fincen.gov/boi
Click File > File a report using the BIO E-Filing System > File BOIR > File Online BOIR
When asked “The Type of Filing”, choose “Initial Report”
Part 1: Reporting Company Information. There are several pieces of information you’ll need, in Part 1 you’ll need:
Complete Part II: Company Applicant Information. Pro tips:
Part III: Beneficial Owner Information
Confirm your personal information and submit your report!
Save a copy of your transcript for your records!