How your non compliant business could cost you $10,000
The Corporate Transparency Act introduces new reporting requirements for companies conducting business in the United States. Starting on January 1, 2024, all reporting companies will be required to file Beneficial Ownership Information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). The reporting rule exempts 23 specific types of entities, however, all other entities will be required to submit the BOI report in 2024 or within 30 days of registering to do business.
Reporting companies (any foreign or domestic corporation, limited liability company, or other entity registered to do business in the United States by the filing of a document with a Secretary of State or any similar office of a U.S. state or tribal government) will be required to provide information about the company itself as well as beneficial ownership information. Companies formed on or after January 1, 2024, will also be required to provide information about their company applicants.
Take the quiz below to find out if you likely have to file. If you do, keep reading below.
How to File the BOI Report
FinCEN will start accepting BOI reports beginning January 1, 2024. All reporting companies that were registered before January 1, 2024, will have one year, or until January 1, 2025, to submit their initial BOI report. Reporting companies formed on or after January 1, 2024, will have 30 days to submit their initial BOI report.
The BOI report is not an annual requirement, and therefore, each company is only required to file an initial BOI report. However, any changes to the information provided in a previous report must be submitted to FinCEN within 30 days of the change.
Reporting companies will need to file their reports electronically using the beneficial ownership secure system (BOSS), created by FinCEN. The system will be available beginning January 1, 2024. Further instructions on how to file the BOI report form will be released by FinCEN in the near future.
Reporting Requirements
Reporting companies will be required to provide information about the company itself as well as beneficial ownership information. Companies formed on or after January 1, 2024, will also be required to provide information about their company applicants.
FinCEN Identifier
Individuals who would prefer not to list personal information on the BOI report may obtain a FinCEN identifier. Those applying for a FinCEN identifier must provide the same information as requested on the report directly to FinCEN. Once a FinCEN identifier is issued, it may be used in lieu of providing the required information about the beneficial owners and/or company applicants on the BOI report. A FinCEN identifier can be requested by checking a box on the BOI reporting form.
Penalties for Non-Compliance
FinCEN has stated that willfully providing false information or failing to report beneficial ownership information may result in significant financial and criminal penalties. The civil penalty for a violation is $500 per day with a maximum of $10,000, per entity. Criminal penalties include imprisonment for up to two years.
Reporting companies that provide inaccurate information unintentionally will have a 90-day grace period to resubmit an accurate report.
Next Steps for Your Company
As we await the development of the online reporting system and the implementation of legal requirements, we recommend that your company begin assessing its reporting obligations.
