Running a business comes with plenty of responsibilities, but compliance with new regulations might not always be top of mind—until it becomes urgent. One of the latest regulatory changes business owners need to pay attention to is the Beneficial Ownership Information Reporting (BOIR) requirements under the Corporate Transparency Act (CTA). If that sounds like a lot of legal jargon, don't worry—we'll break it down into what you need to know and how to stay ahead of the game.
What is BOIR and Why Does It Matter?
BOIR is a new federal requirement aimed at increasing transparency around who owns and controls businesses in the U.S. The goal? To prevent illicit activities like money laundering, fraud, and tax evasion. The rule applies to most small and medium-sized businesses, meaning if you're running an LLC, corporation, or a similar entity, this likely affects you.
In short: If your business falls under the BOIR rules, you're required to report key information about the individuals who have significant control over your company.
Who Needs to File?
If you own a small business or hold ownership in an entity registered in the U.S., chances are, you're required to file a report. Specifically, businesses must disclose information about "beneficial owners"—people who own at least 25% of the company or have substantial control over it. This applies to:
LLCs, Corporations, and Similar Entities formed in the U.S.
Foreign Businesses Registered to Operate in the U.S.
Companies with Few or No Exemptions (Certain industries and large companies with extensive reporting requirements may be exempt.)
What Information Do You Have to Provide?
The BOIR filing requires business owners to submit:
Full legal name
Date of birth
Current residential address
An identifying number from an official document (such as a passport or driver's license)
An image of the document used for identification
This is not a one-time filing. If your ownership structure changes, you must update the information.
When is the Deadline?
Businesses created before January 1, 2024: You have until January 1, 2025, to file your initial BOIR report.
Businesses created after January 1, 2024: You must file within 90 days of formation.
Any changes to ownership? Updates must be filed within 30 days of the change.
What Happens if You Don't File?
Ignoring the BOIR requirements isn't just risky—it can be costly. Failing to comply can result in:
Fines of up to $500 per day for late filings
Civil and criminal penalties, including potential imprisonment for willful violations
This isn't one of those regulations you can afford to ignore and hope it goes unnoticed. The penalties are steep, and compliance is expected.
How to Stay Compliant Without the Headache
The good news? Filing your BOIR report isn't as daunting as it sounds. Here's how to stay ahead:
Check Your Filing Obligation - Determine if your business is required to file under BOIR.
Gather Your Information - Ensure you have the necessary details on beneficial owners.
File with FinCEN - The Financial Crimes Enforcement Network (FinCEN) will be managing these filings, and they provide an online portal for submissions.
Monitor for Changes - If your ownership structure shifts, stay proactive about updating your filing.
Final Thoughts: Compliance is Here to Stay
The BOIR reporting requirement is one of the most significant compliance changes for small businesses in years. While it may seem like just another hoop to jump through, it's designed to increase financial transparency and prevent fraud. The key takeaway? Get ahead of the deadlines and avoid penalties by filing on time.
Business owners already juggle plenty of responsibilities—don't let compliance issues become an unnecessary headache. Staying informed and proactive will help you keep your focus where it belongs: growing your business.