BOI Reporting: Deadlines and Penalties
The United States government has started a new reporting
requirement for businesses called Beneficial Ownership Reporting. This
requirement requires business owners to provide information relating
to the Beneficial Owners of their companies with FinCEN.
A beneficial owner is defined as a 25% stakeholder or somebody who can exert indirect significant influences on the business. A person who can exert indirect significant influence on a business includes people such as those who may own all outstanding debts of a company, collectively owns 25% or more of the business, or who makes significant decisions on the business such as board members.
Who Must File ?
·
Any state-registered businesses such as LLCs,
LPs, etc.
·
Corporations.
· Some Hedge Funds will need to be filed, including many related entities such as management companies, general partners and related entities. In the case of Hedge Funds, you can generally only be excluded from this reporting requirement if you are registered with the SEC or are managed by somebody who is registered with the SEC. You may also have personal business activities which cause you to create entities such as a consulting business, real estate investment venture, or similar activities.
Akram had organized a webinar previously where experts have discussed in detail. You can watch this video to learn more about FinCEN requirements.
When is This Due?
·
Existing entities that started during or before
2023 will be required to file by December 31, 2024. Entities created during or
after 2024 have 90 days from the day they begin to file with
FinCEN.
· Moving forward if the beneficial owners or their information changes, you will be required to submit this information with FinCEN within 30 days of the change.
Penalties if not Filed Timely?
The penalties for failing to file a BOI report with the
Financial Crimes Enforcement Network (FinCEN) can be severe:
- Civil
Penalties: Up to $591 per day for each day the report is late.
- Criminal
Penalties: Fines of up to $10,000 and/or up to two years in prison.
These penalties apply if you:
- Willfully
fail to file your report
- Submit
false or misleading information
- Fail
to update or correct previously reported information
Given these potential consequences, please make sure that you are fully aware of the importance of filing this report on time.
Plan of Action Required
If you determine you would like Akram’s assistance in preparing BOIs, please reach out to us, we will be happy to assist in any way. In addition, if you would like to ask any questions relating to BOI Filling, we are happy to address your questions.
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