Introduction
Starting January 1, 2024, a new rule came into effect that impacts many small businesses across the United States. This rule is about filing something called "Beneficial Ownership Information" (BOI). If you own a small business, this is something you need to know about to stay on the right side of the law.
What is Beneficial Ownership Information (BOI)?
Beneficial Ownership Information (BOI) refers to details about the people who own or control a business. The government wants to know who is really in charge of companies, especially small businesses, to prevent bad actors from hiding behind complicated company structures. By understanding who owns and controls a business, the government can better prevent things like money laundering and financial crimes.
Why is This Requirement Important?
The main goal of this new rule is to promote transparency. That means making sure that the real people behind a business are known. This helps to stop illegal activities, like using businesses to hide money that was gained illegally. When businesses provide this information, it helps law enforcement agencies keep track of who is behind certain actions, making it harder for criminals to hide.
Who Needs to File?
Not every business will need to file BOI reports, but many will. Generally, if your business is a small company that isn’t publicly traded and doesn’t fall into one of the exempt categories (like certain large companies or banks), you’ll likely need to file. Even if you think your business might be exempt, it’s important to double-check. If you’re required to file and don’t do it, there could be serious consequences. Take the File BOI Quiz today to find out if you need to file (it’s free!)
What Information Do You Need to Provide?
When filing a BOI report, you’ll need to provide basic details about your business and the people who own or control it. This includes their full names, addresses, and identification numbers (like a driver’s license or passport number). The idea is to give a clear picture of who’s in charge and who benefits from the business’s operations.
When Do You Need to File?
The requirement to file starts on January 1, 2024. If your business was created before this date, you have until January 1, 2025, to file your initial BOI report. However, if your business is created after January 1, 2024, you will need to file your BOI report within 30 days of your business’s formation.
What Happens If You Don’t File?
Failing to file your BOI report on time can lead to serious penalties. These can include daily fines of up to $500 and even criminal charges that could result in up to two years in prison and fines up to $10,000. It’s clear that the government is taking this requirement seriously, so it’s crucial that businesses do the same. We recommend you file ASAP but if you can't today be sure to sign up to get complimentary reminders to avoid these penalties by filling out this form and we will be sure to remind you!
How Do You File?
Filing your BOI report can be done electronically through our secure system that automatically files with the U.S. Department of the Treasury. Take our quiz to see if you need to file, and if you have all of the necessary information (link to other blog post #3.) you can file today! Our system is a secure way to easily and seamlessly meet the filing requirements.
Conclusion
The new BOI filing requirement might sound complicated, but it’s designed to help protect businesses and the public by making ownership information clear and accessible. If you own a small business, make sure you understand what’s required of you starting in 2024. By staying informed and filing on time, you can avoid penalties and help contribute to a safer business environment for everyone.
