Small business owners need to be aware of a new legislation which requires them to submit a BOI report for their businesses. Failure to comply with the Corporate Transparency Act may put you at risk of serious fines and penalties, so it’s important to stay across this vital business admin tasks. There are a number of specific business types which this applies to, so how do you know if your business is required to submit a BOI report? Consider some of the following snippets of information and you’ll soon get to know more about the legislation and how it affects your company.
More About BOI Reporting and Who It Applies To
There are specific company types that are required to submit a boi report, including corporations, limited liability companies, or any other domestic entities. The U.S. Treasury’s Financial Crime Enforcement Network has enforced this new legislation to ensure that new reporting standards are adhered to. The CTA (Corporate Transparency Act) aims to reduce money laundering and financial misuse, and therefore demand that all businesses established before 2024 that fit within certain criteria, are counted as reporting companies.
Exemptions from BOI Reporting
There are a number of different exemptions that go hand in hand with BOI reporting. One of which is the large operating company exemption, which means that a business has twenty or more full-time employees on their books, over five million dollars in sales and a physical office in the United States. If your business falls within this category, it will be expected that you submit an accurate BOI report, but you will often need to obtain proof of your business structure, location and gross receipts.
Getting Started with BOI Reporting
You will have ninety days from the day you created your business to file your initial BOI report if your initial set-up date is after January 1 2024, and before January 1 2025. Creating a company after January 1 2025 means you have thirty days to file your BOI report, and any previous changes must also be sent to FinCEN within this 30 day period.
Potential Penalties
Failure to provide an accurate BOI can result in criminal penalties. As a business owner, you should actively try to avoid fines and penalties, not only for your brand reputation, but also for your own peace of mind. Penalties can be over $500 per day if it’s late; if criminal penalties are being pursued this could incur a $10,000 fine or up to two years in prison.
As you can see, BOI reports are a significant part of running a small business these days, so it’s important to stay across these changes as much as possible. Although your business may be exempt from submitting a BOI report, it is certainly worth double checking the criteria to make sure you’re not subject to a hefty fine. Hopefully, this article helps to clear up any confusion regarding BOI reporting and points you towards some useful tools to help you submit your report accurately and efficiently.