Starting January 1, 2025, a new regulation from the Financial Crimes Enforcement Network (FinCEN) is set to impact most small and medium-sized businesses across the United States. This regulation, known as the Beneficial Ownership Information (BOI) reporting requirement, is aimed at increasing transparency and combating financial crimes like money laundering and fraud.
As a web design company dedicated to supporting small and medium businesses, Real Avenue Design wants to ensure you’re prepared for this change and know how to meet the new requirements without unnecessary stress.
TL;DR (Short version)
Most small and medium businesses must file beneficial ownership info with FinCEN starting Jan. 1, 2025. Penalties for non-compliance include fines up to $500/day. The filing process is straightforward—visit FinCEN’s BOI page to get started and consult your CPA or business coach for assistance.
What Is the BOI Reporting Requirement?
The BOI reporting requirement mandates that most businesses in the U.S. submit detailed information about their beneficial owners to FinCEN. Beneficial owners are individuals who own or control at least 25% of a company or exercise significant control over it. This effort is part of the Corporate Transparency Act (CTA), signed into law in 2021, designed to deter criminal activity and strengthen corporate accountability.
Who Needs to File?
Nearly all U.S. businesses, including LLCs, corporations, and partnerships, are required to comply. However, some exceptions apply, such as:
- Companies with over 20 employees and $5 million in annual revenue.
- Certain publicly traded companies.
- Certain nonprofits.
Small and medium businesses are squarely in the target group for this new regulation.
To determine if your business is affected, visit FinCEN’s official page on BOI requirements: https://fincen.gov/boi.
What Information Needs to Be Reported?
Businesses must submit:
- Full legal name, date of birth, and residential address of each beneficial owner.
- A unique identifying number from an acceptable ID, such as a driver’s license or passport.
- Information about the reporting company, including its name, address, and Taxpayer Identification Number (TIN).
When Does the BOI Requirement Go Into Effect?
- Effective Date: January 1, 2025
- Deadline for Existing Businesses: December 31, 2025
- Deadline for New Businesses (formed after Jan. 1, 2025): 30 days from the date of formation
Missing these deadlines could result in steep fines or penalties. The civil penalty is up to $500 per day, and criminal penalties can include fines of up to $10,000 or imprisonment for up to two years.
Why Is This Important for Small and Medium Business Owners?
For many small and medium businesses, this is a significant new administrative responsibility. Ignoring it could result in costly fines or damage your business’s reputation. Thankfully, compliance is relatively straightforward with proper guidance.
How to Get Started
- Gather Required Information: Identify all beneficial owners and collect their personal details as outlined above.
- Consult Your CPA or Business Coach: These professionals can guide you through the process and ensure you’re compliant.
- File Your Report Through FinCEN: The official FinCEN BOI filing system will be the primary portal for submissions. More information on the filing process will be available on their website.
Why It’s Easier Than It Sounds
FinCEN has made efforts to streamline the filing process with an online portal designed for user-friendliness. If you’ve ever filed an annual report for your business, you’ll find the BOI filing similarly straightforward. The key is to start early and stay organized.
How Real Avenue Design Helps You Stay Informed
As your trusted web design company, we’re here to help your business stay compliant with new regulations as best as we can. Whether it is for new business regulations that affect us (and you), accessibility, privacy, etc., we try our best to keep you informed.
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Take Action Today
The clock is ticking, but you have plenty of time to prepare. We encourage you to:
- Speak with your CPA: Ask them how this affects your business and what steps to take.
- Contact a Business Coach: They can provide insights on making this process seamless.
By staying proactive, you can avoid fines and ensure your business remains compliant and secure.
