New Federal BOIR Filing Requirements: What You Need to Know
December 10, 2024
Starting this year, a new federal requirement mandates that small businesses and certain entities submit a Beneficial Ownership Information Report (BOIR) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The purpose of this new filing is to increase corporate transparency and combat illicit activities like money laundering, tax fraud, and corruption.
Who Needs to File?
The BOIR applies to “reporting companies,” which include most small businesses, LLCs, corporations, and other entities registered to do business in the United States. Exemptions exist for certain organizations, such as publicly traded companies, large businesses with over 20 full-time employees and more than $5 million in gross receipts, and regulated industries like banks and insurance companies.
If you’re a small business owner or manage a closely held company, it’s essential to determine whether your business falls under this new filing requirement.
What Information Is Required?
The BOIR filing requires businesses to disclose key information about their “beneficial owners.” A beneficial owner is any individual who:
- Owns at least 25% of the company’s ownership interests; or
- Exercises substantial control over the company’s operations or decisions.
The report will need to include:
- Full legal name of the business
- Current address
- Information about each beneficial owner: full name, date of birth, address, and an identification number from a valid document (such as a driver’s license or passport).
Deadline to File
- For businesses created or registered before January 1, 2024: The deadline to file the BOIR is January 1, 2025.
- For new businesses created or registered after January 1, 2024: The BOIR must be filed within 90 days of registration.
How to File
The BOIR can be filed online through FinCEN’s secure filing system, which will be made available on their website. There is no fee for filing, and businesses will need to keep their ownership information up-to-date with timely amendments if changes occur.
Penalties for Non-Compliance
Failure to comply with the BOIR requirements can result in significant penalties. Businesses that fail to file or provide false information could face:
- Civil penalties of up to $500 per day for noncompliance
- Criminal fines of up to $10,000
- Imprisonment for up to 2 years for willful violations
Next Steps for Business Owners
- Review your entity: Determine whether your business qualifies as a “reporting company.”
- Identify beneficial owners: Start gathering the required information for individuals who meet the ownership or control criteria.
- File on time: Be proactive and prepare to submit the BOIR before the deadline.
Local business advisors, attorneys, and CPAs can help you understand your reporting obligations and ensure compliance with the new regulations. For further information, business owners are encouraged to visit FinCEN’s official website.
