Do you know when your BOIR is due?

Time is Running Out!  Navigating the New BOIR Requirement: What Small Businesses Must Know

For many business owners, a newly enacted federal law has imposed a deadline for filing a disclosure of beneficial owners.  That requirement comes in a bid to bolster financial transparency and combat illicit activity, This significant development in corporate compliance is catching the attention of numerous small business owners and corporate legal teams. The new Beneficial Ownership Information Report (BOIR) requirement demands detailed attention from businesses to avoid legal pitfalls and hefty penalties. This blog post aims to shed light on the crux of this mandate, its implications, and why compliance should be a top priority for your company ahead of the impending January 2025 deadline (for those business entities existing prior to January 2024); or even sooner for those that have come into existence since January 2024.

Understanding the Beneficial Ownership Information Report

The Corporate Transparency Act introduced the BOIR with the express purpose of creating a more transparent business environment, which could deter and detect money laundering, terrorist financing, and other illegal financial activities.

According to information sourced from the U.S. Department of the Treasury, all companies are now required to disclose the identities of their beneficial owners, the individuals who ultimately own or control the company. This requirement is not just a mere formality—it is an essential step towards ensuring that companies operate above board and are held accountable for their ownership structures.  Any person whom a company has authorized to act may file the company's BOIR.  Failure to comply with the disclosure filing requirement can lead to criminal penalties of imprisonment for up to two years and/or a fine of up to $10,000 and a civil penalty of $500 per day.  

For Whom and When?

For businesses incorporated before January 2024, a definitive deadline awaits at the beginning of 2025. This provides a fair runway for companies to get their ducks in a row, but remember, time flies, and the earlier you comply, the safer your business stands.

Businesses that sprung up after January 2024 have a slightly different timeline to adhere to—they must file their BOIR within 90 days of their incorporation/organization. This more immediate reporting window underscores the urgency with which new businesses should tackle this requirement to remain compliant from their inception.  Essentially, for those business owners who incorporated or organized in January of this year, your 90-day window expires this month!

The Cost of Non-Compliance

The legal repercussions for failing to submit a Beneficial Ownership Report are no minor slap on the wrist. Penalties are in the offing for those who neglect this crucial piece of corporate housekeeping. While non-compliance penalties are mentioned broadly, it's vital to recognize the severity of consequences, which could vary from penal fines to possible operational hindrances.  Anyone who “willfully” fails to file (or update) a BOIR or provides false information on a BOIR may face civil penalties of up to $500 per day or criminal penalties, including imprisonment for up to two years and/or a fine of up to $10,000. Such a strict penalty not only places a continuous obligation on reporting companies to update BOIRs when any changes in beneficial ownership or control occur but also exposes those reporting companies, their beneficial owners, and their certifying individuals to civil or criminal penalties when they fail to correct inaccurate information.  Business owners, you are on notice!

Key Takeaways for Your Business

• Deadline Awareness: Mark your calendars for January 2025 if your business predates January 2024. (or 90 days from the date of your incorporation/organization for new companies formed subsequent to January 2024)
• Stay Informed: Understand the details of what information needs to be reported.
• Consult Experts: A law firm with expertise in corporate compliance can help ensure that your Beneficial Ownership Report meets all the necessary criteria.

Final Thoughts

With the implementation of this new reporting requirement, the landscape of corporate transparency is evolving. Business owners must adapt promptly to the changing legal demands to ensure their operations remain unencumbered by legal complications. Should you require assistance or have queries regarding the BOIR filing, do not hesitate to seek professional legal counsel.

For further guidance and an in-depth understanding of how this development impacts your business specifically, consider contacting our law firm's experts. At Dragan Ivetic, Attorney at Law, LLC, we strive to protect and advance your business interests through vigilant legal compliance support, including the Beneficial Ownership Information Report requirement.

Our office stands ready to assist you if you need a consultation about filing a Beneficial Ownership Information Report (BOIR).

Contact us for a free initial consultation!

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