BOI Reporting Requirements | H&R Block

• Starting January 1, 2024, entities must comply with beneficial ownership reporting requirements or face penalties, including fines of up to $10,000 and potential prison time.
• Beneficial owners’ information encompasses names, addresses, birth dates, and identification documents.
• Businesses existing before 2024 have until January 1, 2025, to file their initial reports. However, new entities formed on or after January 1, 2024, and before January 1, 2025, have 90 days from the completion of their state registration.

Seeing as the BOI report is part of the government’s efforts to shore up anti-money laundering laws and rein in financial crime more broadly, the last thing you want to do is be on the business end of the law enforcement agencies responsible for doling out penalties.

If you fail to meet the reporting requirements or disclose beneficial ownership information without proper authorization, you could be on the receiving end of civil or criminal actions. Failure to file a complete and accurate initial or updated BOI report with FinCEN can result in a $500-per-day fine, up to $10,000 in total, and up to two years in prison.

Disclosing BOI without authorization carries a $500-per-day penalty, up to a maximum of $250,000, and up to five years’ imprisonment.

Understanding what goes into BOI reporting requirements is vital for business owners, whether you’re the owner of a small entity or a large corporation. Below, we summarize the most crucial information you need to know, including specific reporting requirements, definitions for “beneficial owners,” deadlines, and more.

BOI reporting requirements fall into two categories: reporting company information and beneficial ownership information.

Whether you’re creating an initial BOI report for FinCEN or filing an updated report with amendments, you must include the following reporting company information:

Remember that the requirement to file a BOI report didn’t go into effect until January 1, 2024. The good news is, if you must report, FinCEN started accepting beneficial ownership information reports on that date.

If your company existed before January 1, 2024, you have until January 1, 2025, to file your report. LLCs or other entities created on or after January 1, 2024, and before January 1, 2025, have 90 days to file their initial report. The countdown starts when you receive actual or public notice from the secretary of state or a similar office that your registration is complete.

Starting in 2025, new companies will have 30 days from the date they receive their actual or public notice to file their initial report.

Companies that must file a BOI report can do so electronically through FinCEN’s secure filing system. The catch is that FinCEN acknowledges that certain reporting companies may not be able to do so and will need to contact FinCEN.

FinCEN identifiers are unique identifying numbers that FinCEN gives to individuals or reporting companies upon request after providing specific information. It’s not a requirement, and an individual or reporting company may only request and receive one FinCEN identifier.

Why apply for a FinCEN identifier? The main reason is to make the overall process smoother. As an individual, you must provide FinCEN with the same four pieces of personal information required in the BOI report. Once you do so, you’ll receive a FinCEN identifier.

Reporting companies can then use the FinCEN identifier in place of that personal information when filing the BOI report. This makes it easier to comply with beneficial ownership reporting requirements and provides an extra layer of security for your personal information.

Requesting a FinCEN identifier as a reporting company is a simple matter of checking a box when submitting a BOI report.

Fulfilling your BOI reporting requirements is critical to running a compliant small business. You could be looking at thousands of dollars in fines and even potential jail time if you avoid your reporting obligations.

If a person qualifies as a company’s beneficial owner, you must share specific personal information about them in the beneficial ownership information report.

Corporate entities created or registered to do business in the U.S. in 2024 must report beneficial ownership information to FinCEN within 90 days of their creation or registration to do business. Corporations that existed before 2024 have until January 1, 2025, to report beneficial ownership.

The deadline for filing a BOI report for companies created or registered in 2024 was recently extended. Companies created after the effective date of January 1, 2024, and before January 1, 2025, now have 90 days from the date they receive actual or public notice of registration.

Certain businesses already operating under heavy federal reporting requirements are exempt from beneficial ownership reporting requirements.

Failure to follow beneficial ownership reporting requirements can result in a $500-per-day fine, up to $10,000 total, and up to two years in prison. Additionally, disclosing BOI without authorization carries a $500-per-day fine, up to $250,000 total, and up to five years’ prison time.

For a small business, the beneficial owner will likely be the founder because they own or control more than 25% of the company or otherwise exercise substantial control over it.

This article is for informational purposes only and should not be construed as legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.