The Beneficial Ownership Information Report (BOIR) is an essential part of the U.S. government’s effort to increase transparency in business ownership. As part of the Corporate Transparency Act (CTA), businesses must file the BOIR with the Financial Crimes Enforcement Network (FinCEN) to identify and track the individuals who own or control them. Missing the BOIR first filing deadline could result in fines and penalties, so it’s crucial for businesses to understand the process and submit their reports on time.
Here’s an easy step-by-step guide to help you meet the deadline and stay compliant.
What Is the BOIR and Why Is It Important?
The BOIR is a legal requirement aimed at preventing illicit activities such as money laundering, tax evasion, and fraud. The report requires companies to disclose information about their beneficial owners—individuals who own 25% or more of the business or have significant control over its operations.
By filing the BOIR, businesses help ensure transparency, making it harder for criminals to hide behind complex corporate structures. Failure to file by the first deadline could result in penalties ranging from fines to possible criminal charges for willfully avoiding the report.
Step 1: Determine if Your Business Must File
The first step is determining whether your business is required to file a BOIR. Most corporations, limited liability companies (LLCs), and other similar entities formed or registered in the U.S. must file. However, certain companies are exempt, such as:
- Publicly traded companies
- Large operating companies with over 20 employees and $5 million in gross receipts
- Certain regulated entities, such as banks and credit unions
If your business falls into one of these exempt categories, you may not need to file. However, for most small and privately held companies, the BOIR is a legal obligation.
Step 2: Gather Required Information
Once you’ve determined that your business needs to file, the next step is to gather the necessary information about the beneficial owners. You’ll need:
- Full legal name of each beneficial owner
- Date of birth
- Current residential address
- A copy of government-issued identification, such as a passport or driver’s license
- Ownership percentage or role in the company, specifying whether the individual owns 25% or more of the business or exercises significant control
Make sure all information is accurate, as submitting incorrect or incomplete details can lead to penalties.
Step 3: Submit Your BOIR Online
After collecting the required information, you’ll need to submit the BOIR electronically to FinCEN. The process is straightforward and can be done through the FinCEN portal. Here’s how:
- Create an account on the FinCEN website.
- Log in to your account and navigate to the BOIR filing section.
- Enter the required details about your business and its beneficial owners.
- Upload copies of identification documents for each beneficial owner.
- Review all the information carefully before submitting.
Once you’ve submitted your BOIR, FinCEN will send you a confirmation email. Keep this confirmation for your records.
Step 4: Know the Filing Deadline
The first BOIR filing deadline is fast approaching, and it’s essential to stay on top of it. For businesses formed or registered before January 1, 2024, the deadline to submit the BOIR is January 1, 2025. If your business was formed on or after January 1, 2024, you must file within 30 days of formation.
Missing this deadline can result in penalties, so it’s important to file as early as possible.
Step 5: Update the BOIR When Necessary
It’s not a one-time filing process. Businesses are required to update their BOIR when there are significant changes to ownership or control. You’ll need to update the report within 30 days of any change, including:
- New individuals acquiring 25% or more ownership
- Changes in control, such as new board members or executives
- Changes to a beneficial owner’s personal information, such as address or name
Updating the BOIR ensures that your business remains compliant with regulations and avoids potential fines for inaccurate or outdated filings.
Step 6: Avoid Common Mistakes
To make the filing process as smooth as possible, be aware of some common mistakes businesses make when filing the BOIR:
- Incorrect information: Double-check all personal details and ownership percentages to ensure accuracy.
- Missing documents: Make sure to upload the correct government-issued IDs for all beneficial owners.
- Failing to update the BOIR: Always remember to file updates when ownership or control changes occur.
- Procrastinating on the deadline: Don’t wait until the last minute. The filing process can take time, especially if there are complexities in your ownership structure, so start early.
By avoiding these common pitfalls, you can ensure your BOIR is filed accurately and on time.
Step 7: Seek Professional Help if Needed
If you’re unsure about how to complete the BOIR, or if your business has a complex ownership structure, it’s worth seeking professional advice. Attorneys or accountants familiar with corporate transparency laws can help you navigate the process and ensure compliance.
Hiring a professional may cost money upfront, but it can save you from costly penalties or legal issues down the road.
Conclusion: Stay Ahead of the Deadline
Filing the Beneficial Ownership Information Report may seem like an extra administrative burden, but it’s a crucial part of maintaining legal compliance for your business. By following these simple steps, you can ensure that your business meets the BOIR filing deadline and avoids any penalties or complications.
Stay organized, gather the necessary information, and file well before the deadline to ensure that your business is on the right track. If you’re ever in doubt, don’t hesitate to seek professional guidance to make sure you’re meeting all the legal requirements.