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BOI Reporting is Back: What Every LLC Owner Needs to Know! | BizBud LLC
The BOI reporting requirements are back! If you own an LLC, C Corp, or any business entity, you need to act now to avoid costly penalties. In this video, I’ll explain what BOI reporting is, why it’s important, and what steps you need to take. Don’t risk paying thousands in fines—learn how to stay compliant. Need help? Reach out to us and follow for more tax and business tips!
FinCEN extends beneficial ownership reporting deadline - By Michael Cohn.
The Treasury Department's Financial Crimes Enforcement Network has extended the deadline for beneficial ownership information reporting after an injunction was lifted by a federal appeals court.
FinCEN official says the reports “track more closely” with businesses created in 2024, which have a tighter deadline to file than businesses
BOI update: 6.5 million of 32 million reports filed so far
BOI reporting deadlines extended for certain victims of 5 hurricanes. With less than two months left for most small businesses to file beneficial ownership information (BOI) reports,
Essential Information About BOI Reporting for US Companies
BOI reporting marks a critical change in US regulatory standards, particularly for small companies and entities with less transparent ownership arrangements. BOI reporting is consistent with international norms, making it easier for US firms to conduct business worldwide. Read our blog to gather more information on Essential Information About BOI Reporting for US Companies.
Key insights for businesses: Beneficial ownership information (BOI)
This new year witnessed the Financial Crimes Enforcement Network (FinCEN) implementing the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting provisions. These provisions require reporting on information about beneficial owners of the business by most US business entities. These provisions are aimed at fortifying the US financial system’s integrity, making it tougher for unlawful players to create and use shell companies for money laundering or the secreting of assets. Here we explore the key aspects of the BOI reporting provisions on businesses in the US.
Significance of reporting beneficial ownership information (BOI)
Let’s understand the various aspects of BOI and its significance for business entities
Understanding BOI
BOI pertains to the specifics of individual owners of a company. These owners could have direct or indirect control over the company. Knowing all the true company owners is important to understand the kind of individuals you are doing business with. This knowledge instills confidence and helps keep business decision-making within tolerable risk levels. BOI ensures trust is established with legitimate business entities and provides a better understanding of risk exposure. For instance, you could be doing business with an entity owned by a sanctioned individual or a politically exposed person which could be risky for your business. Such knowledge would ensure you have the option to end such a perilous business relationship.
Importance of BOI
· Before the implementation of BOI regulations, offenders could conceal themselves behind the veil of secrecy created by opaque ownership structures. When BOI reporting becomes mandatory, such offenders will find it harder to hide. For instance, shell companies are often used to hide illegal activities and launder money. Without BOI, identifying shell companies would be time-consuming and difficult.
· Financial institutions also require BOI for due diligence reporting. BOI reporting reveals conflict of interest issues with a company.
· BOI is also important for the government when approving loans, issuing export licenses, or issuing government contracts.
· Businesses across industries also use this information for third-party risk management, to measure their risk exposure and take mitigative steps.
· BOI is also essential for combating financial crime and ensuring compliance with laws on money laundering, sanctions, fraud, financing of terrorist activities, etc. BOI reporting makes it harder for lawbreakers to hide their interests in specific businesses.
· BOI Reporting promotes transparency, ensuring businesses function ethically and legally.
BOI Filing requirements and penalties
BOI information has to be filed by two kinds of companies as per the rules laid down by FinCEN.
· Domestic companies including corporations, limited liability companies, and other business entities, formed by filing a document with the government.
· Foreign companies including corporations and limited liability companies incorporated under the laws of a foreign company, but registered to do business in the US by filing a document with the government.
Failing to report BOI or reporting wrong information will be severely penalized. Willful violations can attract penalties as high as $500 per day of continued violation, while criminal violations can result in imprisonment for up to two years and a fine of $10,000.
Provisions have been made for mistakes or omissions rectifications within 90 days of the original report deadline. Ignoring BOI reporting responsibilities can attract civil and criminal penalties against firms.
Certain companies, such as nonprofit organizations and companies meeting certain specific requirements, are exempt from BOI reporting. However, for the rest of the companies operating in the US, this reporting obligation is mandatory and has far-reaching business implications.
Finlotax: A reliable bookkeeping and taxation firm in California
We are FinloTax, a professional bookkeeping and taxation firm in CA. We have better solutions for all your complex bookkeeping and taxation needs. We can help you simplify BOI reporting to comply with the mandated requirements easily. Contact us today at 4088229406 to talk with our experts.
Understanding these updates is critical in guiding the tens of millions of LLCs, closely held businesses, and other small-business clients t
New BOI reporting guidance issued for short-lived entities and foreign companies
For accounting firms and tax professionals, understanding these updates is critical in guiding the tens of millions of LLCs, closely held businesses, and other small business clients through the complexities of beneficial ownership compliance.
