USA, 24 october 2024- The Beneficial Ownership Information Report (BOIR) is a legal requirement introduced to ensure transparency in business ownership, mainly targeting corporations and LLCs. Mandated by the Corporate Transparency Act (CTA), this report is essential for preventing money laundering, tax evasion, and fraud. While it might seem complicated at first, the BOIR process is manageable if you follow the steps carefully. This guide will walk you through everything you need to know about filling out the BOIR form to help your business comply with the law.
What Is BOIR?
The BOIR, or Beneficial Ownership Information Report, is a form that requires businesses to report details about their beneficial owners—individuals who own or control at least 25% of the company. The goal is to ensure that authorities have visibility into the true owners of companies, which can often be obscured through complex ownership structures.
This requirement is part of the U.S. government’s broader effort to combat illegal financial activities and improve corporate transparency. Failure to file the BOIR accurately and on time can lead to significant fines and other legal penalties, making it essential for businesses to understand and fulfil their filing obligations.
Who Needs to File?
Most U.S.-based businesses, particularly LLCs and corporations, are required to file the BOIR. However, there are some exemptions, such as:
- Publicly traded companies
- Large operating companies with over 20 employees and $5 million in annual revenue
- Certain regulated entities, including banks and credit unions
- Nonprofits and other tax-exempt organizations
If you’re unsure whether your business qualifies for an exemption, it’s a good idea to consult with a legal or financial advisor to avoid any potential compliance issues.
When Is the BOIR Filing Deadline?
The deadline for submitting your BOIR depends on when your business was formed. For businesses created before January 1, 2024, the first filing deadline is January 1, 2025. If your business was formed on or after January 1, 2024, you must file the BOIR within 30 days of formation.
It’s important to note that this isn’t a one-time filing. Any significant changes to your company’s ownership—such as new owners or changes in control—must be reported within 30 days of the change.
Steps to Fill Out the BOIR Form
Let’s break down the BOIR form filing process into manageable steps:
Step 1: Collect the Necessary Information
Before you start filling out the form, gather the following details for each beneficial owner of your business:
- Full legal name
- Date of birth
- Residential address (This must be a current address, not a business address.)
- Government-issued ID number (such as a passport or driver’s license)
- Ownership percentage or level of control in the company (indicating whether they own 25% or more or have significant influence over business operations)
Having this information readily available will make the filing process smoother and reduce the risk of errors.
Step 2: Access the BOIR Filing System
The BOIR must be filed online through FinCEN’s (Financial Crimes Enforcement Network) dedicated portal. If this is your first time filing, you’ll need to create an account on the FinCEN website.
Once your account is set up:
- Log in to your FinCEN account.
- Navigate to the BOIR filing section.
- Start a new report by entering your business’s identification details, including its name, employer identification number (EIN), and formation date.
Step 3: Input Beneficial Ownership Information
Next, you’ll need to input the information you gathered about your beneficial owners into the BOIR form. Be sure to enter accurate details, as incorrect or incomplete information can lead to fines.
Double-check the following fields:
- Names and spelling of the beneficial owners
- Identification numbers (matching the government-issued IDs you collected)
- Residential addresses (ensure they’re up-to-date and match the IDs)
Step 4: Upload Identification Documents
FinCEN requires that you upload copies of government-issued identification for each beneficial owner. These documents must be current and legible. Common examples of acceptable identification include:
- U.S. passports
- State-issued driver’s licenses
- Non-U.S. government-issued IDs (if applicable)
Ensure the scans or photos of the IDs are clear and include all relevant details, such as the ID number, name, and expiration date.
Step 5: Review and Submit
Once all the information is entered and the documents are uploaded, carefully review the entire form. Even small errors can lead to your filing being rejected or flagged for further investigation.
After confirming that everything is correct:
- Submit the form through the portal.
- You will receive a confirmation email from FinCEN verifying that your BOIR was successfully filed. Keep this email for your records.
Step 6: Keep Records Up-to-Date
Filing the BOIR is not a one-and-done process. If there are changes to your company’s beneficial owners—whether through ownership shifts, new owners joining, or changes in control—you are required to update the BOIR within 30 days of the change.
Regularly review your ownership structure and make sure you’re updating the report whenever necessary. Failure to do so can result in penalties.
Penalties for Missing the BOIR Deadline
Missing the BOIR deadline can result in severe consequences for your business. The fines for late or inaccurate filings can be steep, potentially up to $500 per day for non-compliance. In some cases, willful non-compliance could result in criminal charges, leading to fines of up to $10,000 or imprisonment for up to two years.
These penalties underscore the importance of filing the BOIR on time and ensuring all the information provided is accurate. It’s always better to file early and avoid potential issues later on.
Common Mistakes to Avoid
While filling out the BOIR form may seem straightforward, several common mistakes can cause problems:
- Submitting incomplete information: Double-check that all fields are filled out, especially those relating to beneficial owners.
- Using outdated or incorrect addresses: The address on file must match the owner’s government-issued ID.
- Forgetting to file updates: Any changes in ownership must be reported within 30 days.
- Waiting until the last minute: Start the filing process early to avoid technical glitches or last-minute problems.
Conclusion
Filing the BOIR form is a crucial responsibility for U.S. businesses, particularly LLCs and corporations. By gathering the necessary information, accessing FinCEN’s online portal, and submitting the report on time, you can avoid penalties and ensure your business stays compliant with the law. Stay organised, keep your ownership records current, and don’t hesitate to seek professional advice if needed.
By following this quick guide, you’ll have the tools and knowledge to complete your BOIR filing smoothly and efficiently.
Media info:
Website: https://boir.org/
Email: contact@boir.org
Contact: +18562493934
Address: USA
