Introduction
Starting January 1, 2024, most small businesses in the United States will be required to file Beneficial Ownership Information (BOI) reports. But not every business will need to do this. Understanding whether your business needs to file is crucial to staying compliant with federal regulations. Take this 30 second quiz to find out if you need to file now, it’s free!. To learn more let’s dive into who exactly needs to file and how you can determine if your business is affected.
What is a Reporting Company?
A reporting company is any business entity that meets the criteria set by the new rule. Typically, this includes most small businesses that are formed as corporations, limited liability companies (LLCs), or other similar entities. These businesses need to provide information about their owners and controllers. If your business fits into this category, it’s considered a reporting company and will need to file a BOI report.
Entities that are generally Exempt to the Rule
While many businesses will need to file, there are some exemptions. Large publicly traded companies, banks, and certain other types of businesses do not need to file BOI reports. Here are some of the main exemptions:
- Large Operating Companies: Companies with more than 20 full-time employees, over $5 million in annual revenue, and a physical presence in the U.S.
- Publicly Traded Companies: Companies that are publicly traded and already subject to significant federal reporting requirements.
- Certain Financial Institutions: Banks, credit unions, and other financial institutions that are already heavily regulated.
- Nonprofits: Certain tax-exempt organizations, such as those recognized under Section 501(c) of the Internal Revenue Code.
- Governmental Entities: Entities that are owned by the government or are governmental agencies.
- Securities Reporting Issuers: Companies that are already registered under the Securities Exchange Act of 1934.
If your business falls into one of these categories, you are likely exempt from filing. You can always consult with a legal professional to confirm your status, and our quiz can also help you quickly decide!
How to Determine If You Need to File
Taking our quiz is always the easiest and fastest way to determine if your business needs to file. It starts by identifying your business structure. Are you a corporation, LLC, or another similar entity? Our free quiz will help to determine if you qualify for an exemption, and if you don’t you’ll need to file a BOI report.
You should also review your business’s ownership structure. The rule is particularly focused on businesses where the ownership is not entirely clear. If your business has multiple owners, or if the ownership is held by other entities or individuals who may not be well-known, filing is necessary.
What Happens If You Don’t File?
If your business is required to file a BOI report but fails to do so, there can be significant consequences. The penalties for not filing can include fines of up to $500 per day, and in some cases, criminal charges that could result in imprisonment and fines up to $10,000. It’s essential to take this requirement seriously to avoid these penalties. If you are not sure if you are ready to file today, but you want to get complimentary reminders to avoid these penalties fill out this form and we will be sure to remind you!
Conclusion
If you own a small business, it’s important to know whether you need to file a BOI report starting in 2024. Understanding whether your business is a reporting company or qualifies for an exemption can save you from potential fines and legal trouble. Stay informed, review your business structure, and consult with a professional if you’re unsure about your filing obligations.
