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If you are a small business it may seem like the responsibilities are never-ending. This is especially the case with financial reporting and compliance. Beneficial ownership reporting, also known as BOI, is a new and mandatory requirement for 2024 in which businesses report essential information about their ownership.

BOI reporting falls under the jurisdiction of the U.S. Treasury’s Financial Crimes Enforcement Network—or FinCEN, for short—which aims to combat financial crimes such as money laundering, tax evasion, and racketeering. Under the Corporate Transparency Act, companies are required to report their BOI to FinCEN each year.

Understanding and completing BOI reporting is crucial. Here is a guide to help you navigate the process:

Which kinds of businesses need to report BOI?

Any business that has registered with a state or tribal government must consider BOI reporting requirements. That includes sole proprietors, LLCs and corporations. Exceptions for reporting are available for certain businesses – government entities, banks, credit unions, and large operating companies with more than $5 million in revenue and other qualifying criteria. However, for the most part, almost all small businesses will need to report their BOI to FinCEN.

What information is needed?

BOI reports must include essential details such as the names, addresses, dates of birth, and identification numbers of the business owners and key people within the business. Additionally, each owner and key person has to provide copies of identification (passport, driver’s licenses, etc.) with the filing.

Best practices for BOI reporting

Businesses should consider appointing a compliance officer within the organization or outsourcing the responsibility to a qualified professional. This individual can handle the annual BOI reporting on the FinCEN website or with a knowledgeable and reputable partner.

Deadlines for BOI reporting

Existing entities or businesses established before the end of 2023 have until December 31, 2024, to file their BOI report. Any changes to previously reported information must be updated within 30 days. If you start a new business in 2024, you have 90 days to file the BOI report. Entities created after 2024 will have 30 days to file their BOI report.

If there are any changes to your business information, such as a new business address, name, or new owners or key personnel, you have 30 days to report the change with an updated BOI report to FinCEN.

Consequences of failing to report BOI

While FinCen does not charge a fee for BOI reporting, failing to report can lead to significant penalties. Businesses may face fines of $500 per day and potential criminal penalties, including imprisonment and fines up to $10,000.

These sanctions can jeopardize a business’ financial stability, damage its reputation, erode stakeholder trust, and lead to increased scrutiny and additional audits. Therefore, it is crucial to complete and file BOI reports accurately and promptly each year.

Resources to help with BOI reporting

Squire offers comprehensive support to simplify your BOI reporting by providing a user-friendly platform on our website for quick and easy submission of Beneficial Ownership Information. Our dedicated BOI reporting page offers detailed guidance, step-by-step instructions, and ongoing support to ensure your compliance with FinCEN requirements.

Our expert team is available to assist you to confidently navigate BOI reporting, streamlining the reporting process to save you time and reduce the risk of errors. Visit our BOI reporting services page to learn more about how we can assist you in meeting your compliance obligations efficiently and effectively. Additional, you can join Squire for a free webinar on BOI Reporting and check out the FinCEN Small Business Compliance Guide.