As of January 1, 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 be simple and minimize burdens on small business owners.
Key Points
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, its company applicants.
Companies are required to report this information to the (FinCEN). The reporting process began on January 1, 2024. FinCEN provides guidance on deadlines, exemptions, and how to file.
You can file the BOIR using three methods:
- PDF: Fill out the report manually and submit it.
- Online: Use the FinCEN’s BOIR E-Filing System to create and submit your report.
- API: For more advanced users, there’s an API option for filing.
To keep up with updates and alerts related to the Corporate Transparency Act, subscribe to FinCEN updates.
Why Comply?
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.
It’s important file the BOIR correctly and on time to avoid penalties and fines. Schedule a call to learn more about how we can help support your small business’ compliance needs.
