Have you heard that LLCs in the U.S. must file a BOI report but aren’t sure what it is or how to file it? Don’t worry; as a business lawyer, I’ll show you how to file a BOI for your LLC correctly and quickly.
If you’re an entrepreneur or small business owner with an LLC, you’ve probably heard about the Corporate Transparency Act (CTA) and its implications.
The Corporate Transparency Act became effective on January 1, 2024, requiring most small business owners to file a BOI report by the end of this year (sooner if you became an LLC after January 1, 2024.)
This law has scared many online business owners.
It’s just one more thing you must do when legitimizing your business in the state you work in.
This fear is completely understandable since you probably don’t have a law degree, and legalese can be confusing.
That’s why I wrote this post to explain everything you must know about filing a BOI report to ensure legal compliance and avoid hefty fines and civil penalties.
I’ve also put together this masterclass to show you exactly how to file the BOI report correctly in minutes while avoiding costly mistakes.
Table of Contents
What is the Corporate Transparency Act?
The Federal Corporate Transparency Act (CTA) enacted by the federal government established uniform reporting requirements for various types of companies and LLCs.
It details the reporting requirements for personal information about a business’s beneficial owners for complete transparency.
The CTA states that any business that meets the definition of a “reporting company” including foreign businesses must report detailed information about their beneficial owners to a federal agency called the Financial Crimes Enforcement Network (FinCEN).
The Corporate Transparency Act is part of the Anti-Money Laundering Act of 2020.
Filing a BOI report as a reporting company and providing the beneficial owner information ensures your compliance with the new Corporate Transparency Act, which became effective on January 1, 2024.
And no worries! It’s not just you; the Act now requires most business owners to file this BOI report in the U.S.
I’ve had to file it for my online business too.
Why is the CTA Important?
The U.S. Department of Treasury and other relevant U.S. government agencies created the CTA to combat the use of shell companies for money laundering, tax fraud, drug trafficking, and other illegal financial activities.
This new reporting requirement makes it much more difficult for bad actors to benefit from or hide illegal activities or conceal the structure of ownership.
The Act is crucial for both national security and for creating a level playing field for businesses.
By knowing who owns and controls LLCs and corporations, the government can better monitor suspicious activities while ensuring legitimate businesses operate fairly.
For small business owners, complying with the CTA not only helps you avoid penalties but also enhances your business’s credibility.
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What is FinCEN?
The Financial Crimes Enforcement Network, commonly known as FinCEN, is a bureau of the U.S. Department of the Treasury.
Established in 1990, its mission is to safeguard the financial system from illicit use, combat money laundering, and promote national security through the collection, analysis, and dissemination of financial intelligence.
Role of FinCEN in CTA Compliance
FinCEN is the governing body responsible for enforcing the CTA.
It collects BOI reports, analyzes the data, and ensures that businesses comply with the regulations.
The information you provide to FinCEN is stored securely and used to monitor and investigate illegal activities.
Why Should You Care?
If you own an LLC or another type of business entity, you’ll be dealing directly with FinCEN to submit your BOI report.
Understanding FinCEN’s role can help you appreciate the importance of accurate and timely reporting, thereby ensuring your business remains on the right side of the law.
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What is Beneficial Ownership Information?
Beneficial ownership information (BOI) refers to identifying information about the people who indirectly or directly have substantial control of or own a business.
This can include those who have significant influence over business decisions, those who hold a substantial percentage of shares, or those who benefit financially from the company’s activities.
A person directly or indirectly controlling or owning a company is considered a beneficial owner.
Identifying beneficial owners is an essential part of business transparency that builds trust for the reporting company.
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Who is Considered a Beneficial Owner?
A beneficial owner is someone who controls at least 25 percent (through equity, voting rights, or stock) of a reporting business or has substantial control over it.
This could be the company’s founders, significant investors, or key decision-makers.
A beneficial owner is not:
- A minor child
- An employee acting just as an employee
- A person acting as a custodian, nominee, intermediary, or agent for someone else
- An individual whose only interest in a non-reporting or reporting company is of future interest through an inheritance
- A creditor
This is one area of the BOI report that is often confusing for many business owners to figure out on their own.
That’s why I explain this in more detail with examples in this masterclass, so you can correctly report this to FinCEN.
What is a BOI Report?
A beneficial ownership information (BOI) report is a document that provides detailed information about your company’s beneficial ownership information.
This includes names, addresses, dates of birth, and the nature of their ownership interests in the company.
The report must be submitted to FinCEN as part of your CTA compliance requirements.
Effective January 1, 2024, certain types of corporations, LLCs, and similar entities formed or registered in the United States must disclose this required information.
The BOI reporting requirements for reporting companies are broad, and knowing what types of business entities need to file beneficial ownership information can be confusing.
That’s why I created our BOI masterclass to make it super easy for you to ensure compliance.
Watch this video to learn more.
When and How to File Your BOI Report
BOI reports should be filed at the time of company formation or registration with the state.
What Information Must be Disclosed in the BOI Report?
If you’re wondering what reporting companies need to share, this information includes:
- The reporting company’s beneficial owners
- Your company’s FinCEN identifier
- The reporting company, aka your business
- The company applicant (who filed the documents to create a reporting company or business) – This is only required for businesses registered after January 1, 2024.
- Your federal income tax EIN (Federal taxpayer identification number)
- Country and state of formation
- Your current U.S. address
- An identifying number from an acceptable document such as a driver’s license ID or passport
The good thing is that previously created or registered LLCs and other business entities have until the end of this year to submit the paperwork for beneficial ownership information reporting in 2024.
But I wouldn’t wait until the last minute and risk getting fined or facing serious penalties.
What are the BOI Filing Deadlines?
A reporting company created BEFORE January 1, 2024, has until December 31, 2024, to get this initial BOI report filed.
You also need to worry about FinCEN updates and file an updated BOI report if things change in your business.
Any business with a date of formation or registration on or after January 1, 2024, will only have 90 days from the company receiving the actual or public notice.
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Do I Have to File a BOI for My LLC?
This question is one of many that I received and answered in the BOI masterclass, as the legalese can be confusing.
If you have an LLC, PLLC, S Corp, or C Corp, you MUST file this report as a beneficial owner if you are a reporting company, whether a foreign or domestic entity.
If you own an LLC, chances are you’ll need to file a BOI report to comply with the CTA.
Most small businesses (like you and me) do have to file this BOI report.
While there are some exemptions, most LLCs will fall under the requirement to report beneficial ownership information to FinCEN.
If you are not a company applicant or registered owner or have never filed a document with your state, you do not need to file this initial BOI report or subsequent reports.
That is unless you file paperwork with the secretary of state or similar office or something else changes, like a substantial owner, substantial control, or other qualifying event.
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Exemptions to BOI Reporting
This law has 23 exemptions, and I explain all of them in my masterclass in detail.
So watch the BOI masterclass to learn whether your business meets the requirements.
As I mentioned above, most LLCs need to file a BOI, but some similar entities are exempted, such as:
- Sole proprietorships
- Some general partnerships (if you didn’t file a document with a secretary of state)
- Credit unions,
- Banks
- Money services businesses
- Broker or dealer securities
- Insurance companies
- Tax-exempt entities
And more.
Steps to Ensure BOI Compliance
To ensure you meet your BOI reporting obligations, follow these steps:
- Identify Beneficial Owners: Determine who qualifies as a beneficial owner under the CTA guidelines. I know it can be confusing to do this because there are different factors to consider so sign up for my masterclass to learn everything.
- Gather Necessary Information: Collect all required details, including identification documents.
- File the Report: Submit the BOI report through FinCEN’s online portal. Don’t worry, I show you how to do this step by step (line by line) in the masterclass, so you don’t make any mistakes.
- Stay Updated: Regularly review and update the information to maintain compliance. This is important! You are legally required to file an updated report should things change in your business. Learn how to do that in the masterclass here.
Penalties for Failing to Report Beneficial Ownership Information
There are serious penalties for not filing the BOI report on time.
So do not take this legal requirement lightly.
You would face serious penalties:
- Fines of $500 A DAY (so for each day that the violation continues, you will continue to incur a $500 civil penalty) or
- Up to two years in jail AND another fine of up to $10,000!!
And this is directly from FinCEN’s compliance guide:
” Additionally, a person may be subject to civil and/or criminal penalties for willfully causing a company not to file a required BOI report or to report incomplete or false beneficial ownership information to FinCEN.”
Needless to say, it’s very IMPORTANT to take care of this legal requirement right away!
Trust me, as a lawyer, I have read the entire BOI compliance guide and reporting requirements (57+ pages long), so you don’t have to!
Both corporate entities and individuals can be held liable for willful violations of this Financial Crimes Enforcement Network Act. This is not a rule to disregard or ignore.
FinCEN is not messing around, and businesses will face penalties if they fail to meet reporting requirements, whether they’re large operating companies or small online businesses with LLCs.
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How to File a BOI Report (Correctly and Quickly)?
Filing your BOI report becomes super easy and quick with our BOI masterclass.
I’ll show you how to easily file the paperwork through the FinCEN filing system including a corrected report or updated report if needed in the future.
I go over everything you need to know to help you report information the CTA requires, so you don’t make stupid mistakes that can easily result in incorrect reporting and fines.
BOI Filing Masterclass (by a Lawyer)
In this BOI masterclass, you will learn A LOT in minutes:
- How to file the BOI report correctly in minutes instead of wasting hours trying to figure out the legalese on your own (I’ll be sharing my screen and showing you exactly how to fill out the BOI form line by line)
- Do any exemptions apply to you?
- Deadlines for filing the report (important dates you need to know for your current and future businesses)
- How to determine WHO is the beneficial owner(s) under the Act and who should be reported? There are two ways to figure this out, which has been confusing for some people.
- Who is a company applicant and which business has to report this?
- How to get your FinCEN ID
- How to make changes to the filed report in the future (you are legally required to do so within 30 days of a change)
- Overview of the law and common mistakes to avoid
- Some important resources you need to bookmark!
- Answers to FAQ I have received
AND MORE!
You will also receive a copy of my slides/presentation for FREE!
Some companies will take care of the reporting process for you, but they can be expensive. I’m a firm believer in understanding a process like BOI reporting obligations before I outsource it to ensure it’s done correctly.
As a business owner, you want to understand your legal obligations and protect your company’s reputation.
That’s why this masterclass is a valuable investment for any business owner.
So, if you’re ready to save time, avoid costly mistakes, and stay compliant with the CTA, join us today!
Real Challenges and Mistakes to Avoid with BOI for LLC
Understanding Legal Requirements
One of the significant challenges business owners face is understanding the complex requirements of the CTA.
They also worry about not filling out the BOI form correctly; thus resulting in mistakes.
Before I created the BOI masterclass, I had several business owners book consultations with me to understand their legal requirements.
So I decided to create the BOI masterclass to streamline the process and help more entrepreneurs understand their obligations under the Act.
With this masterclass, you will ensure your business compliance easily and effortlessly.
Filling out the BOI form
Another challenge is not knowing how to fill out the BOI form correctly.
It’s crucial to follow FinCEN’s instructions carefully and provide all required information accurately.
As I mentioned above, there’s a 50+ page compliance guide that you need to review and unless you are a lawyer, I bet it’s not something you want to do.
In less than 45 minutes, let me share everything with you that you need to know.
Plus, I’ll be sharing my Zoom screen and showing you exactly how to fill out the BOI form (line by line) correctly!
Staying Updated
Regulations can change, and ensuring your business remains compliant over time is challenging.
Once you sign up for our masterclass, I will stay on top of updates in this law and communicate those with you for FREE.
This way, you are always in the know and know exactly how to maintain compliance for your business.
FAQs on How to File BOI for LLC
Below are some answers to additional questions about how to file BOI for LLC.
Do LLCs have to file BOI?
Companies that file a document within the United States, federally-recognized Indian tribe, or territory to register their company to do business in a state or legitimize their small business must file a BOI report.
The most common types of registered businesses that need to file beneficial ownership information include:
- Any foreign reporting company (non-U.S.)
- Domestic limited partnerships
- Domestic limited liability limited partnerships
- Domestic limited liability companies
So, whether you are a foreign or domestic reporting company, you must file this report in 2024.
If you’ve never had to file a document to do business in your state (usually through the secretary of state office), you don’t have to file a beneficial ownership information report.
How much does it cost to file a BOI report?
The great news is that there is no filing fee for submitting your beneficial ownership information to FinCEN. But laws can change at any time!
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How to submit beneficial ownership?
If your LLC or other business type must file a BOI report, I’ll show you step-by-step how to file this report with FinCEN in our masterclass here. You will avoid common mistakes and will know how to fill out the BOI form correctly.
Have more questions about BOI reporting?
You can watch some of my reels here to learn more! And you can even book a call with me here.
Final Thoughts on How to File a BOI for LLC
Now you know what is BOI for LLC, how to file your BOI report for your small business and everything it entails.
If you created or registered your LLC prior to January 1, 2024, you have some time (until the end of December 2024) to file your beneficial owners’ information.
But I wouldn’t wait until the last minute since you may encounter a few snags filing the initial report for beneficial owners, and I’m sure you don’t want those penalties or fines.
You should sign up for our BOI masterclass, where I go over all the information in great detail and answer all your burning questions on the topic.
Instead of having your information spread out in various articles, our masterclass provides you with all the necessary information in one place, making it easier for you to stay compliant now and in the future.
Save time, money, and the headache of trying to piece together this information on your own by enrolling in our BOI masterclass today. I can’t wait to welcome you!
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