Preparing Your Business for the BOIR First Filing Deadline

The Beneficial Ownership Information Report (BOIR) is a key regulatory requirement that many U.S. businesses must comply with, following the Corporate Transparency Act (CTA). The BOIR aims to increase transparency by ensuring that the government knows the individuals who own or control companies.

Failure to submit the BOIR before the first filing deadline can lead to severe penalties. For businesses preparing for this deadline, understanding the process and gathering the right information are essential steps. This guide will help you prepare your business for the BOIR first filing deadline.

What Is the BOIR?

The Beneficial Ownership Information Report is required by the U.S. government to prevent illicit activities such as money laundering, tax evasion, and financing of terrorism. The BOIR mandates that companies disclose information about individuals who:

1. Own 25% or more of the business.
2. Hold significant influence or control over the company’s operations.

Businesses such as limited liability companies (LLCs), corporations, and certain partnerships must comply with this requirement. This information is stored in a confidential database managed by the Financial Crimes Enforcement Network (FinCEN).

Who Must File?

Most businesses formed in the U.S., especially LLCs and corporations, are required to file the BOIR. However, certain entities are exempt from this requirement, including:

• Publicly traded companies registered with the Securities and Exchange Commission (SEC).
• Large operating companies that employ more than 20 people, generate over $5 million in annual revenue, and have a physical presence in the U.S.
• Financial institutions and certain regulated entities.

If your business falls outside these categories, it is crucial to start preparing for your BOIR filing.

Key Deadline: January 1, 2025

The first BOIR filing deadline for businesses formed before January 1, 2024, is January 1, 2025. For businesses created on or after January 1, 2024, the filing must be completed within 30 days of formation.

This initial filing is just the beginning, as any significant changes to ownership or control must be updated within 30 days of the change. Missing these deadlines can lead to hefty fines and legal trouble for your business, so timely filing is critical.

How to Prepare for the BOIR Filing Deadline

To ensure that your business is ready for the BOIR filing deadline, follow these steps:

1. Understand the Requirements

The first step in preparing your business is understanding the exact requirements for BOIR filing. Make sure you know who qualifies as a beneficial owner in your company, typically individuals who:

• Own 25% or more of the company.
• Have significant influence or control over decisions.

Each beneficial owner will need to provide detailed information, including:

• Full legal name.
• Date of birth.
• Residential address (no P.O. boxes allowed).
• Government-issued ID number (e.g., passport or driver’s license).

2. Gather Information for Each Beneficial Owner

Before starting the filing process, you need to collect all the necessary information for each beneficial owner. This includes:

• Full Name and Identification: Ensure the names match government-issued IDs exactly.
• Current Residential Address: FinCEN requires the most up-to-date residential addresses.
• Copy of Identification: You will need to submit a government-issued ID, such as a driver’s license or passport, for each beneficial owner.

It’s essential to verify that all information is accurate and current to avoid delays or penalties.

3. Organize Business Documentation

In addition to collecting details for each beneficial owner, you should also gather the necessary documentation about your business. The BOIR filing will ask for:

• Business name and employer identification number (EIN).
• Date of formation.
• Physical address of the business headquarters.

Organizing these documents beforehand will speed up the filing process and reduce errors.

4. Set Up a FinCEN Account

The BOIR must be filed online through FinCEN’s portal. If your business does not already have an account with FinCEN, you will need to create one. This account will allow you to submit your BOIR and monitor future updates or filings.

The steps to create an account are simple:

1. Visit FinCEN’s website.
2. Set up an account using your business details.
3. Confirm your email and complete the account verification process.

Once you have a FinCEN account, you can easily file your BOIR and access your records whenever necessary.

5. Submit the BOIR Form

With all your information in place, you are now ready to fill out and submit the BOIR form. Log into your FinCEN account and start the form by entering your business details. Then, proceed to fill out the information for each beneficial owner.

Before submitting the form, carefully review all the details for accuracy. Ensure that:

• Owner names match their government-issued IDs.
• Addresses are up-to-date and accurate.
• Ownership percentages are correct.

After reviewing, submit the form and keep a record of your confirmation email from FinCEN.

6. Monitor for Updates

Once your initial BOIR filing is complete, remember that this is not a one-time task. Any changes in ownership or control must be reported within 30 days. Ensure your team regularly reviews company ownership and updates the BOIR as necessary to avoid fines.

7. Avoid Penalties

Failure to meet the BOIR filing deadline can result in steep penalties, including:

• Daily fines of up to $500 for late or incomplete filings.
• Criminal penalties for willful non-compliance, including fines of up to $10,000 and potential imprisonment.

By staying proactive, organizing your records, and meeting deadlines, you can ensure that your business remains in compliance and avoids these penalties.

Common Mistakes to Avoid

When filing the BOIR, be mindful of the following common mistakes:

• Missing the deadline: Start early to avoid last-minute issues.
• Incorrect information: Double-check all information for accuracy.
• Failing to report updates: Any ownership changes must be reported within 30 days.

Being diligent and thorough will help you complete the process smoothly and avoid legal issues down the road.

Conclusion

The BOIR first filing deadline is a crucial compliance task for businesses in the U.S. Ensuring your business is ready requires understanding the requirements, collecting the necessary information, and filing the report on time. Start early, stay organized, and maintain an ongoing record of your ownership structure to ensure compliance. Meeting this deadline not only avoids penalties but also positions your business as one that operates transparently and responsibly.

By following these easy steps, your business will be well-prepared for the BOIR first filing deadline.