Businesses operating in the United States must understand the requirements and be compliant with the Corporate Transparency Act (CTA). Chief among them is the need to file the Beneficial Ownership Information (BOI) report. BOI provisions require businesses to disclose detailed information about the individuals who exercise significant control over them. But how exactly can businesses comply with this? This article details how, along with explaining the BOI filing requirements.
Understanding BOI Filing Requirements
Before diving into how to comply with BOI filing requirements, it is important to understand what BOI filing is.
To be compliant with the Corporate Transparency Act requires companies to report their beneficial owners’ names, birthdates, addresses and identification numbers to the Financial Crimes Enforcement Network (FinCEN). A beneficial owner is generally defined as anyone who owns 25% or more of the company’s equity or who can exercise substantial control over the company.
Step-by-Step Guide to Filing BOI
1. Determine if Your Company Needs to File
The first step in staying compliant with the Corporate Transparency Act is to determine whether your company is required to file a BOI report. Most corporations, LLCs, and other similar entities that are registered to do business in the U.S. will need to file. There are exceptions to this, however, such as certain regulated entities and large operating companies. Make sure to verify if your company falls under these exemptions.
2. Gather Necessary Information
Once you have determined that your company needs to file BOI, the next step will be to gather all the required information. This includes the full legal names of all beneficial owners, their dates of birth, residential or business addresses, and a unique identification number such as a passport or driver’s license number. Make sure to confirm that all information being provided is accurate and up to date, since incorrect or outdated details could lead to non-compliance issues.
3. Complete the BOI Filing Form to be Compliant with the Corporate Transparency Act
Now, with all the necessary information in hand, you can complete the BOI filing form. FinCEN provides an online portal where you can submit your BOI report. This form will require you to put in all the gathered information about your beneficial owners. It is advised to take your time in this step to avoid putting in any mistakes. Double-checking your entries can help avoid any incorrect information that could potentially result in penalties.
4. Submit the BOI Report
After completing the form, the next step is to submit your BOI report to FinCEN. The filing process is pretty straightforward; however, it is essential to do it within the required timeframe to avoid any penalties. Normally, new entities are required to file within 30 days of their formation, while existing entities have one year from the effective date to be compliant with the Corporate Transparency Act. It is also advised to keep a record of your submission for any future reference.
For More Details: Reach Out to BOIFinCEN Reporting for more details and information.
5. Update Your BOI Filing as Necessary
If you think filing once ensures being compliant with the Corporate Transparency Act, you might want to re-check since compliance with the CTA is not a one-time task. If there are any changes in your company’s beneficial ownership, you are required to update your BOI filing within 30 days of the change. This includes any changes in ownership percentage, control, or any of the required information, such as addresses or identification numbers. Regularly reviewing your BOI filing status will help ensure complete compliance.
Conclusion
To be compliant with the Corporate Transparency Act means to file your BOI reports in the proper manner and within the stipulated deadline. By following the steps mentioned in this article, you can ensure that your BOI filing is accurate and complete. Compliance is an ongoing process, so keeping your information updated and being careful about reporting any changes can not only help you to avoid penalties but also contribute to a more transparent and trustworthy business environment.
