Beneficial Ownership Information (BOI) Reporting For Your LLC: What You Need To Know For 2024 And Beyond

The Corporate Transparency Act (signed into law on January 1, 2021) expanded anti-money laundering laws and created new reporting requirements for certain companies doing business in the US.

A NEW FEDERAL LAW AND NEW REPORTING REQUIREMENTS FOR YOUR SMALL BUSINESS

On January 1, 2024, many small businesses will need to report information about their “beneficial owners” to the federal government. These new rules and reporting requirements may be difficult to understand at first, and if not filed properly or in time, can leave your business with hefty fines and penalties.

 

While it may seem like a lot of information to digest, let me break down the reasons for this new Corporate Transparency Act, who it applies to, and how to file the report.

 

 

BOI under the Corporate Transparency Act

 

The long and the short of these new rules and reporting boil down to an easy explanation—the federal government and Congress are trying to combat and crack down on illegal financial activities, such as money laundering, tax evasion, and financing terrorism. Oftentimes these illegal activities are run under the pretense of small businesses.

 

To deter these criminal activities, Congress passed the Corporate Transparency Act (CTA) that called upon the Financial Crimes Enforcement Network (FinCEN), which created the new Beneficial Ownership Information (BOI) reporting rules.

 

The Beneficial Ownership Information (BOI), goes into effect on January 1, 2024, and requires all small to medium-sized businesses to provide the government with basic information on who is running the company and who is benefiting. This reporting allows the government to then see if there are any potential red flags amongst a company’s true operating intentions.

 

 

Who Must File? Who Is Exempt?

 

The federal government is mostly looking at small to medium-sized businesses. If your company meets some or all of these descriptions, you will need to file a BOI report:

 

  • Less than 20 full-time employees who are employed in the United States

  • Makes less than $5 million in gross sales or receipts within the United States

  • Does not have an operating presence at a physical location in the United States

 

If your company has over 20 full-time employees, has a physical office in the United States, and made more than $5 million in gross sales or receipts then your company qualifies as a large business and is not mandated to file a BOI report. Additionally, publicly traded companies, nonprofits, and inactive businesses are exempt from this new filing.

 

Both domestic and foreign reporting companies are required to file reports. A company is considered a reporting company if a document was filed with the secretary of state (SOS) or similar office to create or register the entity. Corporations (including S corporations), LLCs, and other entities formed through the SOS are subject to the reporting requirements.

 

 

When to Submit Your BOI Report

 

If your small to medium-sized business qualifies for the new BOI reporting, it is important to make sure you get your report in on time. Here is a breakdown of when your company’s BOI report is due:

 

COMPANY START DATE //  BOI REPORT DUE:

Before January 1, 2024  //  January 1, 2025

Anytime in 2024  //  90 days after the official start date

After January 1, 2025  //  30 days after the official start date

 

Once your company’s report is in—as long as you do not have to make any changes or corrections—you do not need to submit your report more than once. If you do need to make changes, you have 30 days after the change has been made to submit an updated report. If your company dissolves or closes, you do not need to submit a report.

 

 

What is a Beneficial Owner and What to Include in Your BOI Report

 

The federal government is looking to see who the beneficial owner is for your company. A beneficial owner is one that directly or indirectly exercises substantial control of the reporting company and/or owns at least 25% ownership interest in the company. Every company has at least one beneficial owner, but there is no limit on how many beneficial owners a company has.

 

The FinCEN identifies four types of individuals who may “exercise substantial control” in a company:

 

  • A senior officer of the company (i.e., president, CEO, COO, CFO, general counsel)

  • A person who has the authority to appoint or remove officers/directors

  • An important decision-maker for the company

  • Any other type of control over the reporting company (i.e., involved in finances, structure, business ventures).

 

Beneficial ownership information (BOI) must be reported for the reporting company’s beneficial owners and (for entities formed or registered after 2023) company applicants. BOI includes an individual’s full legal name, date of birth, street address and a unique ID number. The unique ID number can be from a non-expired US passport, state driver’s license, or other government-issued ID card. An image of the document showing the unique ID number must also be included with the report.

 

 

How to Submit Your BOI Report

 

Beginning January 1, 2024, businesses must file an initial BOI report electronically through the FinCEN website. This filing is free. Remember, there are no additional filings needed unless there is a change or correction that needs to be made since the initial filing.

 

If you have specific questions or need to contact a FinCEN representative, you can reach out online, through email, or by calling.

 

 

 

What Happens if Your Company Does Not Submit a BOI Report?

 

The Corporate Transparency Act can impose severe civil and criminal penalties for not reporting. These penalties can also apply to senior officers of the company.

 

Civil penalties can include daily fines of $500 for not reporting and/or continuing violations. Criminal penalties can include a maximum of $10,000 fine and up to 2 years in prison. These latter criminal penalties are more for businesses that intentionally provide false or fraudulent information.


Thankfully, this new BOI reporting is fairly straightforward and most likely will be a one-time submission for your company. At Hardie CPA, we are here to help you navigate and comply with the new reporting requirements. Our team is happy to answer any questions you have when it comes to filing your company’s BOI report. 

Katie HardieHardie CPA