Demystifying new BOI Reporting for 2024: A No-Sweat Guide for Business Owners
You may have heard whispers online about the new BOI reporting requirements for 2024. Let's dive into this whole Beneficial Ownership Information (BOI) reporting without making it a snooze fest.
What's this BOI Thing Anyway?
BOI refers to the nitty-gritty details about who really owns or pulls the strings behind a company. Imagine it like unmasking the wizard behind the curtain in Oz.
Why Is This Even a Thing?
Thanks to the Corporate Transparency Act of 2021, the U.S. government said "No more hide and seek!" for businesses. This law aims to stop bad guys from using companies as their secret hideouts for ill-gotten gains.
What's BOI and Who's FinCEN?
BOI (Business Owner Information) is all about knowing who really runs the show in a company. Think of it as the who's who in the business world. And the mastermind behind this? That's FinCEN, short for the Financial Crimes Enforcement Network. They're the financial detectives of the U.S. Department of the Treasury, keeping an eye on money movements to prevent financial crimes.
Why BOI?
Back in 2021, the US passed the Corporate Transparency Act. The goal? Make it harder for criminals to use companies as hideouts for their shady money activities.
Reporting Deadlines?
If your company existed before January 1, 2024, you've got until January 1, 2025, to report. If your company pops up between January 1, 2024, and January 1, 2025, you have 90 days after you're officially in business to report. And if you're starting after January 1, 2025? You've got 30 days post-registration.
How to Report?
FinCEN has an electronic filing system for the BOI reporting. You can access it here.
Who Reports?
Mostly, it's corporations, LLCs, and similar entities in the US, or foreign ones doing business in the U.S. However, there are 23 types of entities that are off the hook, so Check if you're one of them.
Who's A Beneficial Owner?
A beneficial owner is defined as any person who owns 25% or more of a company.
What if I Forget or Ignore This?
Not filing these reports isn't just a case of "Oops, I forgot!" Businesses that fail to comply can be hit with fines of $500 per day, up to $10,000. And if you're willfully ignoring this or filing false info, it's a felony, which could mean up to two years in jail. Combine this with anti-money laundering violations, and you're looking at up to 10 years. Although, it does appear that as of 2024, FINCEN is focusing on compliance and education.
Share the Info!
Pass this on to your business pals! Let's keep everyone in the know and out of trouble.
What if I need help?
Prefer us to handle this reporting for you? Book our BOI Reporting done-for-you service here.
Disclaimer: The information provided in this blog is for educational purposes only and does not constitute financial or tax advice. Reach out to The Freelance CFO team with any questions regarding specific financial concerns, or seek the services of a fiduciary.
