Is boir filing necessary?
When running a business, keeping up with regulatory compliance is essential—not just to protect your business reputation but to avoid hefty fines and potential legal consequences. One such critical compliance obligation is the Beneficial Ownership Information Reporting (BOIR) requirement.
This blog post breaks down what BOIR entails, why it’s essential, and the risks if you fail to comply.
The BOIR requirement, stemming from the Corporate Transparency Act (CTA), mandates that certain businesses in the U.S. report information about their beneficial owners. A beneficial owner is generally anyone who directly or indirectly owns or controls 25% or more of the company or has significant decision-making authority within it.
This reporting requirement was introduced to combat money laundering, terrorism financing, and other illicit activities. The data collected will be used by the Financial Crimes Enforcement Network (FinCEN) to help prevent anonymous shell companies from hiding criminal assets.
Nearly every business entity in the U.S., from LLCs to corporations and partnerships, must file BOIR. However, there are exemptions for certain entities, like large companies with more than 20 full-time employees, specific nonprofits, and companies that are already highly regulated and subject to similar disclosures.
BOIR filings require the disclosure of each beneficial owner’s:
- Name
- Address
- Date of birth
- Identification number
The filing must be updated within 30 days if any reported information changes, ensuring FinCEN always has accurate and up-to-date information.
Failing to file your BOIR or reporting incorrect information can lead to significant penalties:
These penalties highlight the seriousness of BOIR compliance. For small businesses, the costs of non-compliance can be devastating and may lead to prolonged financial and legal struggles.
BOIR is designed to increase transparency and make it more difficult for criminals to operate anonymously. By filing accurately and on time, businesses contribute to a safer, more transparent marketplace. Furthermore, proactive compliance keeps your business clear of the fines and legal issues that accompany non-compliance.
Staying on top of BOIR requirements is an essential step in responsible business ownership. By meeting your reporting obligations, you protect your business and contribute to a more accountable corporate landscape. For questions or help with BOIR compliance, reach out to Lengea Law—we’re here to help your business stay on the right side of the law.
Contact us today to ensure your business meets this regulatory requirement, safeguarding your company’s future.
Why is boir required?
It became effective on January 1, 2024. The intent behind the beneficial ownership information report to the U.S. Department of the Treasury is to increase companies’ visibility. Greater visibility should diminish the opportunity for illegal activities like money laundering.
What is the purpose of boir?
Estate planning is crucial in ensuring that your assets are distributed according to your wishes and that your loved ones are taken care of after you’re gone. However, an estate plan is not a set-it-and-forget-it document. Regularly updating your estate plan is essential to reflect changes in your life, family, and the law. Here’s why it’s necessary and when you should consider making updates.
Why You Need to Update Your Estate Plan
- Reflect Current Wishes and Circumstances: Life is dynamic, and your estate plan should be too. Changes in your personal or financial situation may affect your initial decisions. Updating your plan ensures it accurately reflects your current wishes and circumstances.
- Accommodate New Family Members: Births, adoptions, and marriages bring new members into your family who may need to be included in your estate plan. Ensuring these individuals are considered can help prevent disputes and ensure everyone is provided for according to your wishes.
- Account for Deaths and Divorces: Unfortunately, deaths and divorces are part of life’s changes. If a beneficiary or appointed executor passes away or if you get divorced, it’s crucial to update your estate plan to reflect these changes and avoid unintended consequences.
- Adjust to Changes in Law: Estate planning laws can change, potentially affecting the distribution of your assets. Regular updates ensure your estate plan remains compliant with current laws and takes advantage of any new benefits.
- Incorporate Changes in Assets: Over time, you may acquire new assets or dispose of existing ones. Your estate plan should be updated to include new assets and remove those you no longer own, ensuring accurate and intended distribution.
When to Update Your Estate Plan
After Major Life Events
- Marriage or Divorce: When you get married or divorced, your estate plan should be updated to reflect your new marital status and any changes in your wishes regarding asset distribution and guardianship.
Is beneficial ownership information legit?
There has been an alarming rise in fraudulent schemes targeting businesses and individuals required to file Beneficial Ownership Information Reports (BOIR) under the Corporate Transparency Act (CTA). Scammers are preying on the confusion surrounding the new reporting requirements and attempting to trick people into paying for services they can access for free. Here’s what you need to know to protect yourself and ensure you’re following the correct procedure for reporting beneficial ownership.
The Corporate Transparency Act mandates that certain entities, including corporations and limited liability companies (LLCs), report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This requirement is part of a broader effort to increase transparency in corporate ownership and combat financial crimes such as money laundering and terrorist financing.
Beneficial owners are individuals who exercise significant control over a company or who own a substantial percentage of the company’s equity. The CTA requires companies to file a BOI report to provide detailed information about these individuals.
Unfortunately, as new regulations come into play, so do new opportunities for fraudsters. Some scammers are exploiting the confusion and urgency surrounding beneficial ownership reporting by:
- Impersonating government officials or legitimate service providers
- Charging fees for free services
- Requesting sensitive information over the phone or email
To file your beneficial ownership report correctly, follow these steps:
- Verify the legitimacy of any requests for information
- Access the official FinCEN website
- Review the reporting requirements and deadlines
If you encounter any suspicious activity or believe you have been targeted by a fraudulent scheme, report it to the appropriate authorities. You can contact the Federal Trade Commission (FTC) or your state’s consumer protection office for assistance.
By being cautious and using the official FinCEN website, you can ensure your beneficial ownership reporting is completed correctly and securely. Contact an Adams Brown advisor if you have any questions.