Your Guide to Beneficial Ownership Information (BOI) Filing

Navigating compliance requirements under the Corporate Transparency Act (CTA) can feel overwhelming, but understanding Beneficial Ownership Information (BOI) filing is essential for businesses to avoid penalties and stay on the right side of the law. In this guide, we’ll break down what BOI filing entails, who is exempt, what penalties you could face for non-compliance, and how recent developments may affect your filing obligations.

What is BOI Filing?

Beneficial Ownership Information (BOI) filing requires companies to disclose details about the individuals who own or control them. This mandate, introduced under the Corporate Transparency Act (CTA), aims to enhance transparency and combat illegal activities like money laundering, tax evasion, and organized crime.

The filing must include specific details about each beneficial owner, including:

• Full legal name.
• Date of birth.
• Residential address (this must be the home address of the beneficial owner).

Businesses are required to submit this information to the Financial Crimes Enforcement Network (FinCEN) to ensure compliance.

What Entities and Industries Are Exempt from BOI Filing?

While most corporations, LLCs, and similar entities are subject to BOI filing requirements, certain businesses and industries are exempt.

Exempt Entities Include:

• Sole Proprietorships: Since they are owned and operated by a single person, sole proprietorships do not meet the CTA’s criteria for filing.
• Publicly Traded Companies: These companies already disclose ownership information through SEC regulations.
• Nonprofits: Charitable organizations and religious entities are exempt.
• Large Operating Companies: Companies with more than 20 full-time employees, $5 million in gross annual revenue, and a physical presence in the U.S. are exempt.

It’s critical to confirm whether your business qualifies for an exemption. Misinterpreting these rules could lead to compliance issues and penalties.

What Are the Penalties for Non-Compliance?

Failing to comply with BOI filing requirements can result in significant penalties, including:

1. Civil Penalties: Late or incomplete filings can incur fines of $500 per day, adjusted for inflation. This can quickly accumulate into thousands of dollars in penalties.
2. Criminal Penalties: Willfully violating the BOI requirements can result in fines up to $10,000 and/or imprisonment for up to two years.

To avoid these steep consequences, businesses must ensure timely and accurate filings.

What Are the BOI Filing Deadlines?

Meeting the Corporate Transparency Act deadlines is crucial to avoid penalties:

• Existing Businesses (Registered Before January 1, 2024): Must file their BOI reports by January 1, 2025.
• Newly Registered Businesses (January 1, 2024–December 31, 2024): Must file their BOI reports within 30 days of formation or registration.
• Businesses Registered After January 1, 2025: Must file BOI reports within 30 days of formation or registration.

Make sure your business is prepared to meet these deadlines to remain compliant.

Developments on Deadlines

As of December 9, 2024, the enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements has been halted nationwide due to a federal court ruling. On December 3, 2024, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction, stating that the CTA is “likely unconstitutional as outside of Congress’s power.”

The Wall Street Journal

In response, the U.S. Treasury Department filed a notice of appeal on December 5, 2024, indicating its intention to challenge the injunction. However, until further court orders, the CTA’s BOI reporting deadlines are suspended, and reporting companies are not required to comply with the January 1, 2025, deadline.

Given the evolving legal landscape, it’s crucial for businesses to stay informed about potential changes to compliance requirements. We recommend consulting with a compliance professional to ensure readiness to act when final decisions are made.

How The Accounting Doctor Can Help

Navigating BOI filing requirements and Corporate Transparency Act deadlines can be challenging, but you don’t have to do it alone. At The Accounting Doctor, we specialize in providing tailored compliance solutions for businesses of all sizes.

Here’s how we can help:

• BOI Filing Preparation: We’ll ensure your BOI filings are accurate, complete, and submitted on time.
• Exemption Verification: Not sure if your business qualifies for an exemption? We’ll evaluate your situation and provide clear guidance.
• Compliance Monitoring: Stay ahead of changes and deadlines with our proactive compliance management services.
• Long-Term Planning: Combine BOI compliance with holistic financial planning to position your business for long-term success.

Take Action Today

Don’t let the complexities of BOI filing requirements jeopardize your business. Whether you’re determining your filing obligations, exploring exemptions, or simply staying ahead of potential changes, The Accounting Doctor is here to help.

Contact us today to schedule a consultation and ensure your business remains compliant. Your financial health is our priority, and we’re with you every step of the way.