What is the BOI report? And does it apply to your business?

There is a brand-new reporting requirement for many business owners starting in 2024. It is called the Beneficial Ownership Information (BOI) Report, and it was put in place by the government’s Financial Crimes Enforcement Network (FinCEN) in an attempt to prevent financial crimes such as money laundering & fraud. So, exactly what is the BOI report? Here’s the low-down on everything you need to know regarding the new BOI reporting requirements, and what that means for you and your business.

Quick note: None of this is meant to be taken as legal advice. If you have any questions about these new reporting requirements, you can find the most up-to-date information in the BOI Small Compliance Guide published on the FinCEN website 

UPDATE AS OF 3/4/2024: A Federal District Court has declared that the Corporate Transparency Act (the law that put the Beneficial Ownership Information report into effect) is unconstitutional. Even so, the reporting is still currently required except for the members of the National Small Business Association (NSBA) who were the ones that brought this case to court. But, be sure to monitor this as more cases and court declarations may soon follow.

What is the BOI report?

As previously mentioned, BOI stands for Beneficial Ownership Information. That just means that you need to let the government who who owns the business and/or who has “substantial control” over the business operations. Generally speaking, this means anyone who owns over 25% of the business, and who maintains control over the business operations (if they’re not also an owner).

You can file this report yourself for free directly on the FinCEN website, and it should only take you about 10 minutes.

Who needs to file the BOI report?

There are some exceptions, but as a general rule, any business that has registered with a government or tribal agency needs to file a BOI report. That means if you are an LLC, partnership, or Corporation, you will likely need to file if you are in the retail industry.

If you are operating as a sole proprietorship and you never had to register your business with your state or tribal government, you may be able to ignore this requirement for the time being. 

When do you need to file the BOI report?

If you registered your business before January 1st, 2024, you have until January 1st, 2025 to file your BOI report.

If you registered your business sometime in 2024, you have 90 days from the date that you registered to file the BOI report.

If you register sometime after December 31, 2024, you will have 30 days to file the BOI report.

If you fail to file the BOI report within the reporting period, there may be a civil penalty imposed of $500 per day. If the business owner willfully fails to file, or files false information, criminal actions including jail time may be taken.

After you file your initial BOI report, you will also need to file an updated BOI report if there is ever a change in ownership or control of the business, or if the business has moved.

UPDATE AS OF 3/4/2024: As mentioned earlier, further court actions could be coming. If you registered your business in 2024, the 90 day deadline still holds true so make sure you meet that deadline. If you registered prior to 2024, you can certainly wait and see how some of these legal changes fall into place before you decide to file for yourself.

What is the BOI report filing process?

To file your BOI report, you are going to go to https://fincen.gov/boi and click “File a report using the BOI E-Filing System” in the middle of the page. 

From there, you will click “Get Started” under the “Beneficial Ownership Information (BOI) Reporting.

To file the report online, click the “Prepare & Submit BOIR”

From here, you are simply going to answer all the questions as it relates to your business. Here’s the basics they ask:

• You will need to indicate if this is the initial (first) report for this business, or if you are going to correct or update a prior report.
• You will need to report your business information, including legal name, DBA name (if applicable) the EIN or SSN the business operates under, the business contact information, and the state/jurisdiction the business was formed under
• You will need to report the legal name, date of birth, and address for any & all individuals that meet the requirement of being a “beneficial owner”. You can learn more about what that means under Chapter 2 of the BOI Small Compliance Guide, but generally speaking, if you are an individual or partnership LLC, and you are the one(s) “in charge”, you will just need to report the business owner(s). You will also need to upload some form of government identification to prove your identity (driver’s license, social security card, passport, etc…)
• If you registered your business on or after January 1, 2024, you will also need to report any company applicants. This means you need to report the individual(s) who actually completed the registration process with the secretary of state or other government agency. If you registered your own business, this would just be yourself. If you paid a lawyer or other agency to do this for you, you may need to report their information here as well. 

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So, that’s it! You do not need to pay someone else to do this for you. If you are a new business that filed on or after January 1, 2024, and you had the help of a lawyer or other agency to register your business, you may need to reach out to them regarding the new BOI report, and they may be willing to do it for you (for a fee, I’m sure). However, if you filed before 2024, you can certainly take care of all of this yourself for free!

If you still want more information about the new BOI Reporting requirement, you can check out some of these resources:

YouTube video published by FinCEN

BOI Small Compliance Guide published by FinCEN

BOI Frequently Asked Questions on the FinCEN website

Here’s to finding your own version of freedom,