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If you own or manage a Limited Liability Company (LLC), there’s a critical new federal requirement you need to be aware of. Under the Corporate Transparency Act (CTA), all LLCs, along with certain other business entities, must file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN) by December 31, 2024. Failure to comply with this mandate could result in significant financial penalties.
What Is the BOI Report?
The BOI Report requires LLCs to disclose information about their beneficial owners—those individuals who directly or indirectly own or control the business. This includes:
• Full legal name
• Date of birth
• Current residential or business address
• A valid identification document (e.g., driver’s license or passport)
The purpose of this requirement is to increase transparency and combat illegal activities such as money laundering, fraud, and corruption by ensuring the government has accurate information about who owns and controls businesses in the United States.
Who Needs to File?
The rule applies to most LLCs, corporations, and other similar entities registered in the United States. Some exceptions include:
• Large companies with over 20 employees and $5 million or more in annual revenue.
• Companies already regulated by federal oversight agencies (e.g., banks).
If you’re unsure whether your LLC qualifies, consult the FinCEN website or a legal advisor.
What Are the Consequences of Noncompliance?
If you fail to submit your BOI Report by the December 31, 2024, deadline, you may face steep penalties, including:
• A fine of $591 per day for every day your report is late.
• A maximum penalty of $10,000.
How to File Your BOI Report
1. Visit FinCEN’s Website: Go to https://www.fincen.gov/boi to find detailed filing instructions.
2. Prepare Your Information: Gather the necessary details about your LLC and its beneficial owners.
3. Submit Online: FinCEN has provided an online system to submit your report quickly and securely.
Why Is This Important?
This new reporting requirement is part of a broader effort by the U.S. government to increase corporate transparency and hold businesses accountable. By requiring entities to disclose their ownership structure, regulators can better identify and combat illegal financial activity. For legitimate business owners, this also serves to improve trust in the corporate sector.
Next Steps for LLC Owners
If you own an LLC, don’t delay—start preparing your Beneficial Ownership Information Report today. Filing early will ensure you meet the deadline and avoid any penalties. Visit https://www.fincen.gov/boi for full details or consult a legal or financial professional for guidance.
Ensuring compliance not only protects you from costly fines but also contributes to a fairer and more transparent business environment.