Businesses need to worry about filing Beneficial Ownership Information (BOI) Reports if they fall under the scope of the Corporate Transparency Act (CTA), which is regulated by the Financial Crimes Enforcement Network (FinCEN) in the United States. The law applies to most small businesses and certain types of entities, with some exemptions.

Businesses Required to File BOI Reports:

  1. Corporations
  2. Limited Liability Companies (LLCs)
  3. Other similar entities created by filing a document with a U.S. state or tribal authority (e.g., limited partnerships).

Key Details to Understand:

  • The report requires disclosure of beneficial owners, which are individuals who:
    • Own 25% or more of the business.
    • Exercise substantial control over the entity.
  • This aims to combat illegal activities like money laundering and tax evasion.

Exemptions:

Some entities are exempt from BOI reporting, including:

  • Larger entities (e.g., those with more than 20 employees, $5 million in revenue, and a physical office in the U.S.).
  • Publicly traded companies.
  • Certain nonprofits, banks, or entities already regulated by the government.

If your business falls into the non-exempt category, you’ll need to file your BOI report starting January 1, 2024. It’s crucial to stay compliant to avoid fines or penalties.

If your business was started after January 1, 2024, you are required to file your Beneficial Ownership Information (BOI) Report within 30 calendar days of the date your business is created or registered with the state or tribal authority.

This means:

  • If your business is formed on February 1, 2024, you must file your BOI Report by March 2, 2024.
  • The 30-day clock starts from the date your business formation is officially recognized (e.g., when your Articles of Incorporation or similar documents are filed and approved).

Information to Include in the BOI Report:

  1. Entity Information:
    • Legal name of the business.
    • Address.
    • EIN (Employer Identification Number) or equivalent.
  2. Beneficial Owner(s):
    • Full legal name.
    • Date of birth.
    • Residential address.
    • Unique identifying number (e.g., driver’s license or passport) and a copy of the document.
  3. Company Applicants (if applicable for new entities):
    • Individuals who filed or registered the business must also be reported.

Stay Compliant:

Late filing or failure to file can result in penalties, including:

  • Civil penalties up to $500 per day.
  • Criminal penalties up to $10,000 and/or imprisonment.

Give us a call if you need help navigating the filing process! Bellevue (206) 838-3800 or Duvall (425) 788-1544.

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