BOI Reports for LLC's: What Business Owners Need to Know

If you run an LLC - you have a new reporting requirement for your business that you must comply with.

Ownership Transparency in business is no longer optional—it’s a requirement. With the introduction of Beneficial Ownership Information (BOI) reporting requirements in the US under the Corporate Transparency Act, LLC owners must ensure they understand and comply with these new rules. This blog post breaks down what BOI reporting means, who is affected, and how to stay compliant, while also touching on similar requirements for Canadian companies.

What is the BOI Reporting Requirements?

BOI reporting requirements are part of a larger push to combat financial crimes like money laundering and tax evasion. These rules require certain companies to report details about their “beneficial owners”—the individuals who ultimately own or control the company.

In the US, the Corporate Transparency Act (CTA) introduced these measures, with enforcement managed by the Financial Crimes Enforcement Network (FinCEN). By collecting beneficial ownership information, FinCEN aims to increase corporate transparency and close loopholes that criminals have exploited for years.

Do I need to File a BOI Report? 

Most LLCs, corporations, and similar entities formed or registered to do business in the US are required to file a BOI Report. There are a few exceptions:

• Large Companies: Entities with over 20 employees, $5 million in gross receipts, and a physical presence in the US are generally exempt;
• Nonprofit Organizations: Many nonprofits, particularly those already subject to similar transparency rules, are exempt.
• Certain regulated industries, like insurance companies and banks. 

If your LLC doesn’t meet these exceptions, yes, you will need to file a BOI report.

What Information is Required on the BOI Report?

For each beneficial owner, the BOI report must include:

• Full Legal Name
• Date of Birth.
• Residential Address
• Identifying Document

A “beneficial owner” is generally someone who owns or controls at least 25% of the entity or exercises significant control over its operations. This could include members of an LLC, majority shareholders, or others who hold substantial influence.

When is the Deadline to File my BOI Report?

While the new BOI Reporting rules took effect on January 1, 2024, deadlines vary based on when you created or registered your LLC:

If you created your LLC's created before 2024, then you have until January 1, 2025 to file your first BOI report.

If you registered your LLC after January 1, 2024, you must file your BOI report within 30 days of registering. 

These deadlines are strict, and late or inaccurate filings can lead to serious penalties of up to $500/day and even to criminal charges. So if you haven't filed your BOI Report yet, I recommend doing so ASAP. 

How to File a BOI Report

Filing a BOI report involves submitting your beneficial ownership details directly to FinCEN. Here’s a step-by-step process:

1. Gather Required Information: Compile the full names, addresses, dates of birth, and ID documents for all beneficial owners (anyone with over 25% ownership in the LLC
2. Complete the Report: Use FinCEN’s online portal to fill out and submit the BOI report.
3. Double-Check Accuracy: Errors in your filing can lead to penalties or delays, so ensure the information is correct.
4. Report changes: If the beneficial ownership of your LLC changes, you have 30 days to report changes and correct the information in your previously filed reports and must correct inaccurate information in previously filed reports within 30 days of when the reporting company becomes aware or has reason to know of the inaccuracy of information in earlier reports

BOI-Like Transparency Requirements for Canadian Companies

The BOI Report requirements only apply to US LLC's. In Canada we do not have LLC's.

However Canada has been enforcing it's own corporate transparency measures for several years. Under the Canada Business Corporations Act (CBCA), federally incorporated corporations must maintain a register of individuals with significant control (ISC).

Tips for Staying BOI Compliant

To navigate these transparency requirements effectively, here are a few tips:

1. Maintain Up-to-Date Records: Regularly review and update beneficial ownership details to ensure accuracy. Remember you only have 30 days to update your BOI report if there is a change to the beneficial ownership (owners who own at least 25% of the LLC)
2. Monitor Deadlines: Keep track of filing dates to avoid late submissions.
3. Get advice when you need it!: Work with a legal or accounting expert familiar with corporate transparency laws in your jurisdiction if you need specific legal advice. 

Conclusion

The new BOI reporting requirements in the US mark a significant shift toward corporate transparency, and LLC owners must act quickly to ensure compliance. 

By staying informed, keeping detailed records, and seeking professional advice, you can protect your business from costly penalties and contribute to a more transparent corporate environment.