To Business Owners or Anyone Looking to Create a Business:
The landscape of regulatory compliance evolves daily and a significant update has come into effect this year that merits our immediate attention: the introduction of the Beneficial Ownership Information (BOI) reporting requirement by the US Federal Government’s Financial Crimes Enforcement Network (FinCEN). This requirement represents a pivotal shift towards greater transparency in business ownership and operations, aimed at curbing financial crimes. As we navigate these changes, our firm is dedicated to ensuring your business not only complies with these new mandates but also fully understands the broader context in which these changes occur, including the benefits they bring.
Why Should We File?
Non-Compliance has severe consequences:
- “civil penalties of up to $500 for each day the violation continues and
- criminal penalties of up to two years in prison and a fine of up to $10,000.“
What is BOI Reporting?
The BOI reporting requirement is a critical step toward unveiling the ownership structures of various business entities to prevent illicit financial activities. With the implementation of the BOI E-Filing system, the process for reporting beneficial ownership information has been significantly streamlined. This requirement, though seemingly an additional compliance burden, is set against a backdrop of advantages offered by structured business formations. Attached to this email is the Frequently Asked Questions on the FinCEN.gov Website, see that PDF for details.
Who Must File?
- Obligated Entities: LLCs, corporations, and similar entities formed through a state filing must adhere to BOI reporting requirements. This includes a vast array of business structures that benefit from legal recognition and protections.
- Exemptions: Sole proprietorships and general partnerships, which have not formalized their structure through state registration as LLCs, are exempt from these requirements. This distinction helps clarify reporting obligations and underscores the importance of structured business entities.
When Must We File?
- Initial Reporting: Entities in operation before January 1, 2024, are required to report by January 1, 2025. New entities have a 90-day window from establishment.
- Ongoing Updates: Any significant changes to your business or ownership must be reported within 30 days, underscoring the importance of diligent record-keeping.
Is Having a Business Structure Worth the Trouble?
While compliance with BOI reporting does come with its costs, it’s essential to recognize the broader advantages of operating a structured business entity, such as an LLC or corporation. These entities often benefit from tax advantages, such as potential savings through various deductions and credits, and legal protections, including limited liability for owners. These benefits not only justify the costs of compliance but also contribute to the overall resilience and growth potential of your business.
Our Comprehensive Services:
To navigate the complexities of BOI reporting, our list of Services will now include:
- Initial Setup and Filing: For a $300 fee, we ensure your business meets initial compliance requirements.
- Monthly Compliance Support: For $125 per month, we provide ongoing monitoring and reporting services to keep your business in continuous compliance, reflecting any changes in ownership or business structure.
Why Act Now?
The interplay between the necessity of compliance and the inherent benefits of a structured business entity underscores the importance of adhering to these new requirements. Our team is here to guide you through this process, ensuring that your business not only remains compliant but also leverages the full spectrum of benefits afforded by your chosen business structure.
We encourage you to view this requirement not just as a regulatory obligation but as an integral component of your business’s legal and financial health. Please set up a free consultation to discuss how we can assist your business in navigating these changes and reinforcing your business’s foundation.