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Beneficial Ownership Information

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Paperwork is an inescapable reality of operating a business.  Being good at paperwork is not enough to enable you to generate demand for your products or to make your products affordable when materials are expensive and consumers are on a tight budget, but no one ever tanked a business by filling out too much paperwork or being too meticulous in doing it.  Conversely, even if you have keen business sense and abundant luck, failure to complete the paperwork that the law requires can cause your business significant financial hardships and may even contribute to its eventual failure.  Every business structure has its own requirements about which documents it must file at the beginning and end of its lifespan and which ones it must file every year.  The beneficial ownership information (BOI) is not a long or complex document, but failure to file it can result in costly civil penalties to the tune of $591 per day, and even criminal fines of $10,000 or more.  For help complying with BOI reporting and other legal requirements, contact a Washington, D.C. small business lawyer.

What Is Beneficial Ownership Information, and Who Must Report It?

The beneficial ownership information (BOI) report is a document that most businesses must file with the Financial Crime Enforcement Network (FinCEN) of the U.S. Department of the Treasury.  This requirement is a provision of the Corporate Transparency Act of 2021.  Its purpose is to prevent businesses from operating as shell corporations, where it is difficult to identify the individuals benefiting from the company’s activities, thereby making it easy for them to use the proceeds for illegal purposes.

Therefore, the BOI report must include the names and addresses of all owners who benefit financially from the company and all individuals that play a major role in its decisions.  If any of these entities are companies, the BOI report must also include information about the individuals that control these companies.  Furthermore, many businesses are exempt from filing BOI reports, and some businesses have failed to comply simply because the owners mistakenly believed that they were exempt from the requirement.

Each business must file a BOI report only once.  You must file a new BOI report only if there is a change in beneficial owners.

The New Deadline for Reporting Beneficial Ownership Information

Laws change all the time, and things are especially uncertain now.  The Treasury originally set the deadline for January 1, 2025, but it recently extended the deadline until January 15.  Furthermore, because of pending legal challenges, the future of the Corporate Transparency Act is uncertain.  The best way to avoid costly penalties for failing to comply with BOI reporting requirements is to work with a corporate law attorney and ensure that you file accurate information in your report by the deadline.

Contact Tobin O’Connor Ewing About Business Reporting Compliance

A Washington, D.C. business law attorney can help you file a BOI report if your company is required to file one.  Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.

Sources:

fincen.gov/boi-faqs#C_1

msn.com/en-us/money/companies/treasury-delays-deadline-for-small-businesses-to-file-new-form-to-avoid-risk-of-fines-for-noncompliance/ar-AA1wwTWW?ocid=msedgntp&pc=ACTS&cvid=fdd8d8bdaada4dfa8debbc3b708ec1ff&ei=41

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