20 Nov BOI Reporting Deadline Looming: Is Your Business Compliant?

Millions of small-business owners, including those in U.S. Territories like Puerto Rico, are impacted by the Jan. 1, 2025 deadline for beneficial ownership information (BOI) reporting under the Corporate Transparency Act. The Corporate Transparency Act aims to prevent illegal activities (e.g., money laundering, fraud, funding terrorism) by requiring businesses to disclose which individuals own them. Affected businesses must submit a BOI report on the Financial Crimes Enforcement Network (FinCEN) website by Jan. 1, 2025. Galíndez LLC’s team wants to give you an overview of this report and how to comply successfully.

What action does your small business need to take?

Below, we’ll review which businesses are accountable for BOI reporting, the requirements, and how to file a report.

What is beneficial ownership information?

Beneficial ownership information is identifying details (name, date of birth, address, passport, or driver’s license number) about individuals who own or control a company. You may be a beneficial owner if you directly or indirectly exercise “substantial control” over, own, or control at least 25% interest in a business. According to FinCEN, you may exercise substantial control over a company if you fall into any of the following categories:

Who has to file a BOI report?

• A corporation, limited liability company, or other entity created by filing a document with a secretary of state or any similar office in the U.S. (or in one of its territories).
• A foreign company (including corporations and LLCs) registered for business in the U.S. through official filings.

Most sole proprietorships and general partnerships don’t have to submit a report because they’re not required to file a formation document with their applicable secretary of state. Additionally, 23 types of businesses are exempt from BOI reporting requirements, including certain publicly traded companies, nonprofits, and some financial institutions. The previously mentioned Small Entity Compliance Guide breaks down all 23 categories to help you determine whether your business meets one of the exemptions.

What information is required for BOI reporting?

If your business qualifies as a reporting company, you must complete and submit a BOI report through the FinCEN website. As part of this report, you’ll need to provide details about your company and its beneficial owner, including:

• Company information:
  • Legal name
  • Any trade names or “doing business as” names
  • Current street address
  • Jurisdiction of formation or registration
  • Taxpayer identification number

• Beneficial owners information:
  • Name
  • Date of birth
  • Residential address
  • Identifying number from an acceptable identification document (such as a passport or U.S. driver’s license) and the name of the issuing state or jurisdiction of that document
  • Image of the document used to obtain the identifying number

If your business was created or registered on or after Jan. 1, 2024, you must also provide information about company applicants. A company applicant is an individual who directly files (or is primarily responsible for filing) the document that creates or registers your company.

When to file a BOI report

The deadline for meeting the BOI reporting requirement varies based on when your business was created or registered to do business:

Who will have access to my beneficial ownership information?

The goal of beneficial ownership reporting is to make it more difficult for individuals to hide illegal activities through shell companies or other opaque ownership structures. As a result, FinCEN may give beneficial ownership information access to:

• Federal agencies engaged in national security, intelligence, or law enforcement activity
• State, local, and Tribal law enforcement agencies with court authorization
• Officials at the Department of the Treasury
• Foreign law enforcement agencies and other authorities that submit a request through a U.S. Federal agency to obtain information for authorized activities related to national security, intelligence, and law enforcement
• Among other regulatory agencies

FinCEN stores beneficial ownership information in a secure, non-public database.

What happens if I don’t file a BOI report?

You may be subject to civil and criminal penalties if you do not meet your BOI reporting requirements. You may face a fine of up to $500 (adjusted annually for inflation) for each day you violate the requirements. You may also be subject to up to two years in prison and a fine of up to $10,000. These penalties also apply to anyone who files false beneficial ownership information or knowingly fails to correct or update previously reported information.

Do I have to file a BOI report every year?

No, reporting beneficial ownership information is not an annual requirement. You’ll only need to submit a report once unless you need to update or correct information.

How do I file a BOI report?

You submit a BOI report through FinCEN’s website. You can complete your report as a PDF or use FinCEN’s online system. There’s no charge to file a report through FinCEN.

If you choose to complete your report as a PDF, you’ll need access to Adobe Reader. You download the PDF BOI report file, input your information, and upload the final product to the FinCEN website. Using the online system, you’ll follow the prompts, provide your information, and submit the form.

After you submit the BOI report (using either method), you can download a copy and receive a confirmation of receipt. If you need to update or correct your report, you can follow the same steps to submit an amended version.

Galindez LLC is available to provide the guidance on complying with BOI reporting requirements and all your financial needs. Feel free to contact us immediately for more information.