Understanding the BOIR Filing Requirement: A Guide for U.S. Business Owners

The Corporate Transparency Act (CTA) mandates that certain U.S. business entities disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This requirement is fulfilled through the submission of a Beneficial Ownership Information Report (BOIR).

Who Needs to File?

The CTA’s reporting requirements apply to a wide range of entities, including:

• Domestic Entities: Corporations, limited liability companies (LLCs), and other similar entities formed under U.S. state or tribal law.
• Foreign Entities: Corporations and LLCs formed under foreign laws but registered to do business in the United States.

Certain entities are exempt, such as:

• Large Operating Companies: Those with more than 20 full-time employees, over $5 million in gross receipts or sales, and a physical presence in the U.S.
• Regulated Entities: Banks, credit unions, insurance companies, and others already subject to extensive federal or state regulatory oversight.

Information To be Filed

Following details are required as part of reporting for each beneficial owner of the business:

• Full legal name
• Date of birth
• Residential address
• A unique identifying number from an acceptable identification document (e.g., non-expired U.S. driver’s license, passport)

Deadlines

• Companies created or registered before January 1, 2024: The initial deadline for filing was set for January 1, 2025. However, due to certain recent legal developments, the FinCEN has extended this deadline to January 13, 2025.
• For companies registered between January 1, 2024, and January 1, 2025: Within 90 days of receiving actual or public notice that their creation or registration is effective. The requirement for filing for companies falling under this category is also currently on hold. However, FinCEN has encouraged voluntary submissions.
• Companies created or registered on or after January 1, 2025: Within 30 days of receiving actual or public notice that their creation or registration is effective.

Penalties for Non-Compliance

Failure to comply with the CTA’s reporting requirements can result in significant penalties:

• Civil Penalties: Up to $500 per day for each day the violation continues.
• Criminal Penalties: Willful failure to report, or providing false information, can lead to fines up to $10,000 and imprisonment for up to two years.

Why You Should File Now

Given the current legal uncertainties, it’s understandable to feel hesitant about proceeding with the BOIR filing. However, taking proactive steps can be beneficial:

• Avoid Last-Minute Rush: Once the legal ambiguities are resolved, there may be a surge in filings. Completing your report now can save you from potential delays and complications later.
• Ensure Compliance: By filing early, you demonstrate your commitment to compliance, reducing the risk of oversight or missed deadlines in the future.
• Peace of Mind: Addressing this requirement promptly allows you to focus on other aspects of your business without the looming concern of regulatory obligations.

Next Steps

1. Stay Informed: Regularly check with your consultant and reputable news sources for updates on the CTA’s status.
2. Prepare Documentation: Even if you choose to wait for further legal clarity, gather and organize the necessary beneficial ownership information so you’re ready to file when required.
3. Consult Professionals: Seek advice from legal or compliance experts to ensure you understand the requirements and implications for your specific business situation.

If you have any questions or need assistance with your BOIR filing or compliance under the Corporate Transparency Act, our team is here to help. Reach out to us at info@befiler.com for expert guidance and support tailored to your business needs. Don’t let compliance stress weigh you down—let us simplify the process so you can focus on what matters most: growing your business!