BOI provides info to help small businesses succeed, such as reports on trends, insights, and data.

It's time to take a closer look at Beneficial Ownership Information (BOI) reports and what they mean for your small business.

These reports were created as a result of Congress's concern about money laundering and other financial crimes. It's likely that filing a BOI report will cause some entrepreneurs and investors to feel overwhelmed. The report identifies people who own 25 percent or more of a corporation or LLC, and those who have control over the entity. This information is collected and stored in a federal database that can be accessed by law enforcement and financial institutions.

It's important to get ahead of this reporting requirement for several reasons. Some accountants and attorneys may not want to do this type of work, which is why you might need to file it yourself. There are also harsh penalties for failing to file, including a daily penalty of $500 and even imprisonment in the worst-case scenario.

When you do file a BOI report, you'll need to provide basic information about your company, such as its full legal name, trade name, and address. You'll also need to provide the same information for each beneficial owner of the company. This includes their full legal name, date of birth, address, and identification documents. Corporations, LLCs, and other entities formed after January 1, 2024 must also list the applicant who filed the formation documents.

There are some organizations that are exempt from BOI reporting. This includes entities regulated by a federal or state agency, those with more than 20 full-time employees in the U.S., those generating more than $5 million in revenue in the U.S., and those with a physical office. Inactive entities with less than $1,000 in transactions and no assets are also exempt.

When it comes to filing deadlines, those who have entities that existed before January 1, 2024 have until January 1, 2025 to file. Entities formed after January 1, 2024 but during that same year must file within 90 days of confirmation. Entities formed after January 1, 2024 have 30 days from confirmation to file. If any information changes, an updated report must be filed within 30 days.

It's wise to read the Small Entity Compliance Guide provided by the U.S. Treasury and Financial Crimes Enforcement Network before you file. Both individuals and reporting companies can apply for a FinCEN identifier, which will make it easier to provide the required information.

If you have any questions or feel uncomfortable with the process, you can reach out to your accountant or attorney. They should be able to help you with filing your BOI report correctly.

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