Filing your first Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) is a crucial step for trade businesses. And while it can feel overwhelming, we wanted to provide you with a simple step-by-step guide to help you.
What is a BOI Report and Why Is It Important?
The BOI report is a mandatory filing under the Corporate Transparency Act (CTA), designed to combat financial crimes such as money laundering and fraud. By identifying individuals who own or control a company, FinCEN ensures transparency and accountability in US businesses.
Who Needs to File?
Most small businesses, LLCs, and corporations, including those in the trades, are required to need to file unless exempt. To determine your company’s obligation:
- Assess Exemptions: Exemptions include publicly traded companies, certain nonprofits, large operating companies (with over twenty employees, $5 million in revenue, and a US office), and specific financial institutions.
- Evaluate Company Status: If your company was created or registered in the U.S. and doesn’t fall under an exemption, you likely need to file.
Steps to File Your BOI Report
1. Determine Your Filing Requirement: Start by confirming whether your company is required to file. Most small businesses, LLCs, and corporations will need to file unless they fall under an exempt category (e.g., publicly traded companies, banks, or certain nonprofit organizations). Reviewing FinCEN’s guidelines can clarify your filing obligations.
2. Understand Your Filing Deadline: Filing deadlines vary depending on when your company was formed. Missing the deadline can lead to penalties of up to $500 per day or even criminal charges, so it is critical to file on time.
3. Gather the Necessary Information to ensure a smooth filing process
For the Company:
- Full legal name
- Taxpayer Identification Number (TIN), Employer Identification Number (EIN), or Social Security Number (SSN)
- Physical address of your principal place of business
- Date of formation or registration
For Beneficial Owners:
- Full name, date of birth, and residential address
- Government-issued identification (e.g., driver’s license, passport)
- Details on ownership percentage or control over the company
For Company Applicants (if applicable):
- For businesses created or registered after January 1, 2024, details of the person who filed or registered the company will also be required.
5. Review and Submit Your Report: Carefully double-check the information you have entered for accuracy.
- Ensure details for beneficial owners and the company match official records.
- Attach valid, up-to-date identification documents.
- Confirm that all required fields are completed.
Once verified, submit your report and save a copy of your confirmation receipt for your records. If you receive a FinCEN ID for any beneficial owner, keep it secure for future filings and corrections.
6. Update Your Filing as Needed: Any changes in beneficial ownership, management, or company details must be reported to FinCEN within thirty days. Examples of changes include:
- A new owner gaining 25 percent or more ownership.
- A change in the company’s principal business address.
- Updates to a beneficial owner’s name or contact information.
4. Choose Your Filing Method:
- Online Filing: The FinCEN portal offers the most efficient and user-friendly online filing experience. Simply create an account, input your information, and submit electronically.
- PDF Submission: Prepare your BOI report offline using Adobe Reader. Save your progress, reuse the form for updates, and submit it electronically when ready.
Common Filing Mistakes to Avoid
To ensure a smooth filing process, be aware of these common mistakes:
Forgetting to include company applicants for entities created after January 1, 2024.
- Omitting beneficial owners with significant control.
- Submitting incomplete or outdated information.
- Missing the filing deadline, which can result in penalties.
Resources for Assistance
While Contractor in Charge does not handle the filing directly, we provide resources and guidance to help you complete your BOI report confidently. Our tools are designed to streamline your preparation process.
Additional Information
For more detailed information, refer to FinCEN’s official resources:
- Beneficial Ownership Information Reporting
- BOI E-Filing System
- Beneficial Ownership Information Frequently Asked Questions
By following these steps and utilizing available resources, your trade business can ensure compliance with BOI reporting requirements, allowing you to focus on your core operations.