Understanding the Upcoming BOIR Deadline: What Small Business Owners Need to Know

A New Regulatory Deadline is Approaching – Small Business Owners Need to Take Note

The Beneficial Ownership Information Reporting (BOIR) requirements, part of the Corporate Transparency Act (CTA), mandate that certain businesses report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) by the upcoming deadline. Here’s what you need to know about BOIR, who it impacts, and how to ensure your business complies.

What is the BOIR?

The BOIR requirements are part of a larger effort to combat financial crimes like money laundering and tax evasion. Under these rules, businesses must report information about their beneficial owners—individuals who own or control at least 25% of the business or exercise significant control over it. The information collected will be kept in a confidential database managed by FinCEN and is intended to increase transparency in business ownership.

Who Needs to Report?

Not all businesses are required to report under BOIR. However, the rules apply to many small and medium-sized businesses, including corporations, limited liability companies (LLCs), and other entities registered to do business in the United States. Owners with multiple entities must file a report for each one separately. Exemptions exist for certain entities, such as publicly traded companies, large operating businesses, and certain nonprofits, but most small businesses must comply.

What Information Needs to Be Reported?

If your business is not exempt, you’ll need to report specific information about each beneficial owner, including:

Full legal name
Date of birth
Current residential or business address
A unique identifier, such as a passport or driver’s license number

For those with multiple business entities, you must file separately for each entity, as every business must have an individual record showing clear ownership. BOIR rules also require businesses to update their records whenever ownership or control changes, keeping information accurate over time.

Key Dates and Deadlines

Businesses began filing January 1, 2024.

For businesses in existence prior to this date (January 1, 2024), the deadline to file is one year later, giving existing companies until January 1, 2025, to submit their information.
New entities formed on or after January 1, 2024, and before January 1, 2025, must file within 90 days of their formation.
New entities created or registered to do business in the United States after January 1, 2025, must file their initial BOIR within 30 days of formation.

Following the initial filing, businesses must report any changes in beneficial ownership within 30 days of the change.

Penalties for Non-Compliance

Failing to comply with BOIR requirements can lead to significant penalties. Civil fines and criminal penalties may apply, with daily fines accruing for unreported or inaccurate information.

Steps to Prepare for BOIR Compliance

Identify Beneficial Owners: Begin by identifying all beneficial owners who meet the reporting requirements.
Collect Required Information: Gather the necessary personal information for each beneficial owner, ensuring it is accurate and up-to-date.
Consult Legal or Financial Professionals: If you’re unsure about whether your business is required to report, consult a legal or financial professional for guidance.
Submit Your Report to FinCEN: Prepare to submit the information to FinCEN by the appropriate deadline depending upon your business circumstance, either directly to FinCEN or with the assistance of a compliance service provider.

Stay Compliant and Informed

The BOIR deadline represents a new compliance requirement for many small businesses, and preparation is essential to meet the reporting standards. By understanding BOIR requirements, gathering the needed information, and filing your report on time, you can avoid penalties and keep your business compliant.

Need Help Preparing for the BOIR Deadline?

Our BOI filing service is designed to guide small business owners through the reporting process, ensuring accuracy and compliance every step of the way. Contact us today to make sure your business is on track and ready for the deadline.