Is Your Small Business Required to File a BOI Report?
Many small businesses across America may be impacted by Beneficial Ownership Information (BOI) reporting requirements. This article provides a comprehensive overview of BOI, but for the most up-to-date information, be sure to visit FinCEN's official page.
The Corporate Transparency Act (CTA) requires certain small businesses to report information about the individuals who own or control the business—the “beneficial owners”—to the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN). The Federal law aims to help prevent and combat money laundering activities.
Don’t Risk Non-Compliance Penalties and Fines
Willful failure to report BOI by the established deadlines—or not updating information as needed—carries hefty consequences. Individuals could face up to two years imprisonment and a fine up to $10,000, in addition to civil penalties of $606 per day.
How do you know if BOI impacts your small business? And how can SurePayroll® By Paychex help ease your potential reporting obligations? Read on.
Who Qualifies as a Beneficial Owner?
The Corporate Transparency Act defines a beneficial owner as an individual who directly or indirectly:
- Owns or controls 25% or more of a reporting company’s ownership interests.
- Exercises substantial control over a reporting company.
LLCs, S corporations and C corporations may qualify as a BOI reporting company.
Did You Complete Your BOI Reporting? We’re Sure We Can Help.
When it comes to BOI reporting, SurePayroll joined forces with FincenFetch to offer a secure, simple, and speedy BOI reporting solution that can help save you time and trouble.
How Can SurePayroll Help Me with BOI Reporting?
SurePayroll, through our connection with FincenFetch, can help your small business meet federal reporting requirements by filing initial and updated BOI reports on your behalf. Current SurePayroll customers can sign up for BOI reporting by logging into their payroll account. The fee is $200.
I’m Not a SurePayroll Customer. Can You Still Help Me?
Yes. If you’re not a SurePayroll customer, we’re happy to help ease your reporting burden by filing initial and updated BOI reports on your behalf. Sign up for BOI reporting at https://app.fincenfetch.com/start?ref=filepcboir The fee is $250. After filing your BOI report, we invite you to learn more about how SurePayroll can help simplify your small business operations.
When is the BOI Reporting Deadline?
Depending on business creation or registration effective date, small business owners should keep the following reporting deadline information handy:
- By January 1, 2025. Filing deadline for all businesses in existence prior to January 1, 2024.
- Effective on or after January 1, 2025. All businesses required to report will have 30 days from establishment or registration to file.
- Effective on or after January 1, 2024. Newly formed small businesses have 90 days from the date of receiving notice that the company’s creation or registration has become effective to file their BOI report.
Is It Difficult to File a BOI Report?
Filing a BOI report is not necessarily difficult, but it does take time away from running your business. A BOI report requires the following information.
For Reporting Companies
- Full legal name
- Any trade names, DBAs, or trading as names
- Current U.S. street address of its principal place of business in the U.S.
- Jurisdiction of formation or registration
- Taxpayer ID#
For Beneficial Owners
- Individual’s full legal name
- Date of birth
- Current residential address (no P.O. Boxes allowed)
- A unique ID# from an acceptable ID document (passport, U.S. driver’s license, and name of issuing state or jurisdiction of the ID document
- Must supply an image of the ID document and it cannot be expired
Is the Corporate Transparency Act Unconstitutional?
While there are multiple pending lawsuits regarding the constitutionality of the Corporate Transparency Act, reporting requirements are still in effect for the majority of reporting companies. In March 2024, a federal district court in Alabama ruled that the Corporate Transparency is unconstitutional, however that ruling has only temporarily paused any enforcement against the plaintiff class in that specific case. The U.S. Department of the Treasury has filed an appeal, and the case is still pending. SurePayroll will continue to monitor these court cases and post updates as information becomes available.
What are the Types of BOI Reporting Companies?
There are two types of reporting companies; both must file a document with a secretary of state or similar office, and both could include corporations or LLCs, as well as other legal entities.
- Domestic Reporting Company (DRC), created through the filing of its documents.
- Foreign Reporting Company (FRC), formed under the law of a foreign country and has registered to conduct business in the U.S. by the filing of a document with a secretary of state or any similar office.
Is My Small Business Exempt from BOI Reporting?
Possibly. Seek counsel from a trusted professional advisor to better understand if your business meets one or more of the 23 BOI reporting exemptions. According to the CTA, large operating companies, public utilities, certain financial institutions, and insurance companies might be exempt if all criteria are met.
Are Sole Proprietorships or General Partnerships Exempt from BOI Reporting?
Possibly. Seek legal counsel from a trusted professional advisor to better understand if your business meets one or more of the 23 BOI reporting exemptions.
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