How To File Your BOI Report and Avoid a $500/day Penalty

What is the BOI?

The Beneficial Ownership Information (BOI) report is a filing requirement for certain businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury. This helps combat illicit activities such as money laundering and terrorism financing by providing authorities with key information about business ownership.

Who Needs to File a BOI?

Businesses that are required to file:

• Domestic and foreign entities that are created or registered to do business in the U.S. and are not exempt.

• Corporations, LLCs, and similar entities must file, regardless of whether they are based in one state or doing business across multiple states.

• Any entity that is created after January 1, 2024 must file a BOI report upon formation, disclosing their beneficial owners to FinCEN.

Entities formed before January 1, 2024:

• Businesses formed before January 1, 2024 are required to file a BOI report by January 1, 2025. This means businesses formed before this date must disclose their beneficial owners within one year of the BOI rule’s effective date.

• After the initial filing, these entities will need to update their BOI filings if any beneficial ownership changes occur.

Who Is Not Exempt?

1. Small Businesses:

   • Businesses that do not meet the exemption criteria (e.g., more than 20 employees or $5 million in annual revenue) are required to file.

2. Entities Created or Registered After January 1, 2024:

   • Any new business formation on or after January 1, 2024, must file a BOI report within 30 days of their formation date, regardless of size or revenue.

3. Small Businesses with Fewer Employees or Revenue:

   • Entities that do not meet the exemption thresholds (more than 20 employees and over $5 million in annual revenue) must file the BOI report.

4. Entities That Are Not Exempt by Type:

   • Regulated entities such as banks, credit unions, and registered investment advisers are exempt, but most businesses, including startups, e-commerce businesses, and smaller service providers, are not.

5. Inactive Entities:

   • If your entity has been inactive for more than one year, it may not be required to file. However, if the business is still legally active or doing business in any way, it must file.

How to File a BOI

1. Visit the Official Website Go to FinCEN's BOI Filing Page for all the necessary instructions and resources.

2. Create a FinCEN AccountIf you haven’t done so already, you’ll need to create an account with FinCEN in order to file your BOI.

3. Provide Required InformationYou will need to supply:

   • The legal name of your entity.

   • Your business address.

   • Details of your beneficial owners (name, date of birth, address, and identification numbers such as a passport or driver’s license).

4. Submit the ReportOnce all information is gathered, submit the BOI report through the online platform. Ensure that the information is accurate and complete to avoid penalties.

Penalties for Non-Compliance

• Failure to file the BOI report by the required deadline or submission of inaccurate or incomplete information can result in significant penalties:

  • Civil penalties can reach up to $500 per day for failure to file.

  • Criminal penalties may include fines up to $10,000 and/or imprisonment if the filing is willfully false or fraudulent.

It is crucial to ensure that the BOI report is filed accurately and timely to avoid these potential penalties.

Exemptions to Filing

• Large Operating Companies:

  • Companies that have more than 20 employees and more than $5 million in annual revenue are exempt from filing.

• Regulated Entities:

  • Businesses already subject to other federal regulations, such as financial institutions (banks), public companies, and certain other entities, do not need to file.

• Inactive Entities:

  • If your entity has been dissolved or inactive for over one year, it may not need to file, but be sure to check your specific situation on the FinCEN website.

Need Help?

If you need any assistance with filing your BOI, or have questions about whether your entity qualifies for exemptions, we recommend reaching out to legal professionals or accountants. You can also check FinCEN’s FAQs page for more detailed guidance.

This guide is intended to help you stay compliant and avoid any penalties. Make sure to keep accurate records and file the BOI report as required to protect your business and ensure transparency.

---

Our Mission at Brown Ribbon Exchange

We are a community-driven platform designed to empower women entrepreneurs of color by providing a space to exchange skills, build meaningful connections, and grow their businesses without the financial barriers. Our mission is to create a sustainable ecosystem where collaboration and empowerment are at the heart of every transaction.

Sign Up