If you’re a business owner, you have probably seen the acronym “BOI” floating around recently. You’ve probably also seen click bait videos or reels trying to scare you about being fined $500 a day if you don’t report. I’m here to help you filter through the scare tactics, scams, and those trying to make money off of this new law. Here’s the straight scoop on BOI – what it is (and what it isn’t) and what to do (and what not to do).
What is BOI?
BOI stands for Beneficial Ownership Information. A new federal reporting requirement was established effective January 1, 2024 that requires many companies in the United States to report information about their beneficial owners. The information has to be reported to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury.
Why do we have report BOI?
Congress passed the Corporate Transparency Act in 2021 that created this BOI reporting requirement. Essentially The U.S. government is trying to make it harder for money-laundering, illegal activities, etc. to occur, as many of the “bad guys” use shell companies or other ownership structures to facilitate these activities. The government wants to know who has “beneficial ownership” of each registered company in the United States.
But I’m a small business, do I need to report?
The answer is yes, probably. There are a few exceptions, but if you have registered your company with the Secretary of State as an LLC, Corporation or etc. you must report. As an example, if you are in Florida, this means if you have registered your business entity on Sunbiz, then you must report. If you are operating as a sole proprietor and have not filed for an LLC or any other legal structure, then you don’t have to report your BOI. And yes, this is a U.S. government reporting requirement – so even though your state already has all of your entity information, you still have to report your BOI to the U.S. government separately.
When do I need to report in order to avoid penalties?
- If your company was created or registered prior to January 1, 2024, you will have
until January 1, 2025, to report BOI.
- If your company was created or registered on or after January 1, 2024, and before
January 1, 2025, you must report BOI within 90 calendar days after receiving
actual or public notice that your company’s creation or registration is effective,
whichever is earlier.
- If your company was created or registered on or after January 1, 2025, you must
file BOI within 30 calendar days after receiving actual or public notice that its
creation or registration is effective.
- Any updates or corrections to beneficial ownership information that you
previously filed with FinCEN must be submitted within 30 days.
How do I report my BOI?
The good news is that as a business owner, you can report this information yourself right on the FinCEN website at www.fincen.gov/boi . Unless you have a very complicated situation, my opinion is that you DO NOT need to pay anyone to file this information on your behalf. I followed the instructions to file my own BOI for my business via the website and it took me 15 minutes, start to finish. I have a single-member LLC.
Watch out for scammers
As with many new laws and regulations, there are always people trying to capitalize on the situation. Opportunists know that most small business owners are going to be scared or nervous about making sure they are in compliance with this new law. These people have already started sending solicitations via mail and e-mail wanting to charge you a fee to “help you” file your BOI and to be compliant.
It is FREE to file via the FinCEN website, and as I mentioned, it is quite simple to do so. Please do not pay someone to do this for you.
In my opinion, you may be solicited two different ways. One is that you may be contacted by a legitimate company that has been set up to charge people to “help” them file their BOI. Not illegal, but also not necessary. The other is that you could be contacted by a true scammer that wants you to scan a QR code or follow a link that is not to the FinCEN website and enter your information. Know that FinCEN is NOT going to send you an email or letter. Just to straight to their website to report your BOI.
Tips and tricks for reporting
Be sure to read all of the instructions on the FinCEN website and double-check all of your entered information before submitting. You will also need to upload a copy of some form of ID, so make sure you have a copy of your drivers license or passport ready to upload. Also, if your company has more than one owner or person who benefits from the company, you need to report the information for each beneficial owner. Be sure to read the instructions to ensure you include everyone necessary.
Hope this information helps to calm your fears about reporting your company’s BOI. If you have questions or get stuck, check the FAQ’s on www.fincen.gov/boi or contact a business attorney or a CPA. I’m happy to help.
You’ve got this!
