You Have Another Form to File.
Regulations. Forms. Registrations
Not the best hook for news of great importance to the entire business community.
How about this? Five hundred dollars a day for non-compliance.
Penalties are steep for the new law under the Corporate Transparency Act (CTA) that requires all corporations (LLCs, S-Corps and C-Corps) to file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN).
All those acronyms add up to an enhanced federal effort to reduce financial crimes related to money laundering and shell companies for many kinds of federal crimes including human trafficking, drug trafficking, illegal arms sales, terrorism funding etc.
Before you get too concerned, this story has a pretty happy ending. It costs nothing to file and takes just a few minutes to do so.
Almost all small and medium sized businesses have to file a BOI in 2024. Your business needs to file if you created your company by filing a document with the Secretary of State. This includes partnerships, LLCs, S-Corps, and C-Corps. If you started your business BEFORE January 1, 2024, you have until December 31, 2024 to file without penalty. However, if you start/started your business AFTER January 1, 2024, you have only 90 DAYS to file before penalties kick in.
A Beneficial Owner directly or indirectly exercises “substantial control” or directly or indirectly owns or controls twenty five percent or more of ownership interests. Some examples: Three members of an LLC, each controlling thirty three percent of the interests, would all have to file. Another example would be a COO of a 12-employee manufacturing corporation and any other C-suite employees.
There are twenty-three filing exceptions at time of writing. Here are some of the most widely applicable exceptions: Companies in highly-regulated environments, tax exempt entities, certain registered or “large” investment companies, inactive entities. Additionally, companies that have 1) 20+ full-time employees; AND 2) Physical presence in U.S.; AND 3) More than $5M in gross receipts/sales. This is not a complete list. Double check with your accountant or legal counsel if you are unsure. (Of course, this article is neither exhaustive nor legal advice.)
- Have this information ready before you login and file.
- Legal name and DBA/trade name
- Current physical address
- Federal Taxpayer ID number
- State where the company registered/formed
- Individual’s name, date of birth, and address
- Number and issuing jurisdiction of U.S. passport (or foreign passport if that is all that is available), driver’s license, OR state/local/tribal identification.
- Digital Copy of identifying document
WHERE DO I FILE? https://www.fincen.gov/boi
After you file, you will get a receipt showing the information submitted and that the submission was successful.
There are also services such as FileForms who, for a fee, will file for you. You may want to look into these services if you have many beneficial owners who need to do so.
It is extremely important you file on time to avoid the heavy fines, but it is also extremely easy to do so for most small businesses. There have already been Small Business Development Center clients who have filed with no problems.
The Small Business Development Center provides no-cost consulting and low-cost training to help business dreamers and owners make an impact on our community. Success happens when people understand all aspects of a running a business (including the tedious forms and registrations.) If your business wants to impact our local economy and bring important products and services to Southeast Idaho, take advantage of the free consulting and training at 208-282-4402 or Contact the Idaho Small Business Development Center today to begin working with a consultant.
About Ann Swanson
Ann Swanson is the regional director of the Small Business Development Center (SBDC) at the ISU
College of Business. Reach out at 208-282-4402 or swanann@isu.edu for an appointment. Services are no cost.
