Updated September 22, 2024
Beginning in 2024, small businesses that fall under the definition of a reporting company are required to file a Beneficial Ownership Information Report (BOIR) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
The BOIR aims to shed light on criminal activities that threaten national security, fair business competition, and our financial system. The reporting system is designed to minimize the burden on small business owners.
What You Need to Know
The BOIR provides information about the ultimate owners or controllers of companies. It helps track beneficial ownership, which includes details about the entity, its beneficial owners, and, in certain cases, information regarding the person who actually filed formation documents with the state.
The deadline for reporting for new entities formed after January 1, 2024 is 90 days from the date of registration or creation.
The deadline for reporting for entities that were already in existence before January 1, 2024 is January 1, 2025.
FinCEN provides guidance on deadlines, exemptions, and how to file.
Compliance is Essential
According to the Corporate Transparency Act, the BOIR is an essential tool for promoting transparency and accountability in business ownership. Failure to comply can result in penalties, including:
Civil Penalties: Companies that do not submit the required BOIR or provide false information may face civil penalties. These penalties can be substantial and may vary based on the severity of the violation.
Criminal Penalties: In cases of willful non-compliance or deliberate misrepresentation, criminal penalties may apply. These can include fines and even imprisonment.
Business Disruption: Non-compliance can disrupt business operations. Financial institutions may refuse services to companies that fail to provide accurate beneficial ownership information.
Reputational Damage: Public knowledge of non-compliance can harm a company’s reputation. It may affect investor confidence, business relationships, and overall trust.
Legal Action: Authorities can take legal action against non-compliant entities. This may involve investigations, court proceedings, and legal expenses.
To keep up with updates and alerts related to the Corporate Transparency Act, subscribe to FinCEN updates.
We Can Help!
Counter Point is pleased to announce that we now have a BOIR filing system, powered by Licenz. Through this partnership, we can confidentially and securely help business owners prepare, submit, and track BOIR filings.
With over 30 years of experience working with small businesses, Licenz’s team proactively manages a company’s risk profile to avoid compliance concerns, including those related to BOIR filing. Complying with BOIR requirements can be complex and labor-intensive. This solution ensures peace of mind by saving valuable time and minimizing the risk of costly errors. To learn more, send an email to info@counterpointhcm.com today!
