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Learn about Beneficial Ownership Information (BOI) compliance 

In 2021, the government enacted the Corporate Transparency Act (CTA) into federal law. Their stated aim was to combat money laundering, tax fraud, financial crimes, terrorist financing and other illegal activities.

One of the requirements of the CTA was that businesses submit documentation about their financial dealings with individuals who may have direct or indirect control or ownership of a business. They were to do this by submitting a Beneficial Ownership Information (BOI) Report

While the CTA and thus the need to file a BOI report is at the time of writing on hold due to legal challenges, the government is trying to get it re-established. What the future brings remains to be seen, but here is how things stood before the law was put on hold.

Reporting sensitive information about company operations

The BOI report was used to report the names, addresses, date of birth and personal information of individuals with control or ownership of some limited liability companies (LLCs) formed or registered to do business in the United States. These individuals may make major decisions for a company, own 25% of the company’s shares or have control over the company’s equity. This information may need to be updated regularly if the owner of a business changes. 

There were several deadlines businesses needed to be aware of when filing the BOI report. The deadline for corporate entities that existed prior to January 1, 2024, to file was January 1, 2025. 

Corporations that were registered between January 1, 2024, and December 31, 2024, were expected to make a BOI report within 90 days after receiving notice of an effective creation or registration.

Corporations created or registered on or after January 1, 2025, were to be given a 30-day deadline to file a BOI report.

Corporations that failed to report their BOI by the deadline may have faced consequences.  Failing to make a report could lead to civil penalties, including $500 in fines per day, $10,000 per violation and incarceration. 

It is crucial that corporations comply with current federal laws, which can be quite difficult when laws change or are put on hold. Business owners who want to be sure they keep up with any changes in requirements may want to reach out for legal guidance.

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