As 2024 approaches, one critical deadline that businesses and professionals need to stay on top of is the Federal BOIR (Beneficial Ownership Information Reporting) deadline federal boir deadline. Whether you’re a small business owner, corporate executive, or legal professional, understanding this new requirement is essential to ensure compliance and avoid penalties.
What is the BOIR Deadline?
The Beneficial Ownership Information Reporting (BOIR) is part of the Corporate Transparency Act (CTA), which was enacted in January 2021. The CTA requires certain entities, including corporations, limited liability companies (LLCs), and similar entities, to report information about their beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This reporting is a key step in preventing money laundering, tax evasion, and other illicit activities.
The BOIR deadline for 2024 refers to the date by which entities must submit this beneficial ownership information to FinCEN. While the exact deadline can vary depending on when an entity was formed or registered, most entities formed before 2024 will need to report their beneficial owners by January 1, 2025. For entities created in 2024, the report is due within 30 days of formation.
Who Needs to File?
The BOIR applies to most small and medium-sized entities that are formed or registered to do business in the United States. However, certain exemptions exist for larger, more established entities, including:
- Large operating companies: Entities with more than 20 employees, more than $5 million in annual revenue, and a physical office within the U.S.
- Regulated entities: Banks, credit unions, and other financial institutions already subject to regulatory oversight.
- Inactive entities: Companies that do not engage in any business or activities and have no substantial assets.
If your entity falls under the requirement, you will need to provide specific details about its beneficial owners—individuals who, directly or indirectly, own or control at least 25% of the company or who have significant control over the entity’s operations.
What Information Must Be Reported?
The required information for each beneficial owner includes:
- Full legal name
- Date of birth
- Residential address (or business address if applicable)
- A unique identifying number from an acceptable identification document (such as a passport or driver’s license), along with the document’s issuance country.
For reporting entities, the information required includes:
- Entity name
- Business address
- State or tribal jurisdiction of formation
- IRS Employer Identification Number (EIN)
Why is BOIR Reporting Important?
The primary goal of the BOIR requirement is to increase transparency in U.S. business entities and make it harder for individuals to hide behind shell companies. With this information, law enforcement and other government agencies can more easily trace criminal activity, enforce sanctions, and prevent financial crimes such as money laundering and terrorist financing.
Consequences for Non-Compliance
Failure to comply with BOIR reporting requirements can result in penalties, including:
- Fines of up to $500 per day for failure to file or update information.
- Criminal penalties for willfully providing false or fraudulent information, which may include fines up to $10,000 and potential imprisonment.
How to File Your BOIR Report
Filing your BOIR report is done electronically through the FinCEN portal. Once submitted, your information will be securely stored, and any updates or changes to beneficial ownership must be reported within 30 days of the change. This could include new owners, changes in ownership percentage, or alterations in control of the entity.
What’s Next for 2024?
With the deadline approaching, business owners should begin gathering the necessary information and prepare to file their reports well in advance. It’s crucial to ensure accuracy in your submissions, as incorrect or incomplete information can lead to delays and potential penalties. Consulting with legal or financial professionals can help ensure compliance and minimize risks.
Conclusion
The Federal BOIR deadline is a significant milestone for U.S. businesses in 2024. Staying informed about these requirements and taking timely action can help businesses comply with the Corporate Transparency Act and avoid costly penalties. Be sure to mark your calendars, and don’t delay in preparing for the BOIR filing—ensure your entity is ready for 2024 and beyond!