BOI Report: New Law Punishes Small Business Owners

If you're confused about the new BOI Report that all formed companies are required to file, then you're not alone. The penalties for not complying with this new law are DEVASTATING for small business owners.

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I’m tired of seeing good people go to prison. You’re a good person, right? You don’t want to go to prison, do you?

Well, the government quietly created a new reporting requirement for ALL companies, and if you don’t file this report, then you face 2 years in prison, a $10,000 fine, and even DAILY fines of $500 per day.

When does this new law go into effect? Well not until January 1st of 2024. Wait…
Under this new law (the Corporate Transparency Act) the Government demands answers to some very invasive questions about the leadership of nearly all formed businesses in the United States. This means no more private companies.

This is HUGE, but nobody is talking about it! If you’re at risk, then it might not be long until you hear a knock at the door.

Are You at Risk?

If you own or control at least 25% of a business, or if you just exercise substantial control over a business, then you’re at risk if you don’t file this new Beneficial Ownership Information Report, also known as a BOI report.

If your company is a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian Tribe, then you are at risk.

But it isn’t just domestic companies. If your company is a foreign company registered to do business in any U.S. state or Indian tribe, then you are also at risk.

There’s one caveat here. There is a short list of industries who are exempt from having to file this invasive BOI report, including publicly traded companies, nonprofits, and certain large operating companies. So if your business is one of these, then you’re safe (for now).

If your business isn’t one of these industries, then the clock is already ticking.

When Must You File?

When you must file this new report, which we’ll cover in depth in a minute, depends on when you started your company. If your company was in existence on December 31, 2023, then you have until January 1, 2025, to file this invasive BOI report.

If your company was formed in the year 2024, then you have 90 days to file this BOI report. But if your company is formed on January 1, 2025, or later, then you have just 30 days to file this BOI report.

Also, and here’s the tricky part that many people are missing: If you have already filed your BOI report, but your reported information has changed, then you also only have 30 days to update the government.

With all of that in mind, let’s discuss what actually goes into this invasive BOI report.

What Must You File?

Your BOI report must be filed with an agency called FinCEN. That’s the Financial Crimes Enforcement Network. This bureau of nerds under the U.S. Department of Treasury actually included binary code in their logo that spells FinCEN.

When preparing this report for your company, you need to have copies of the passports or state issued driver’s licenses of each person who owns or controls at least 25% of the business, or who exercises substantial control over the business.

Determining everyone who has at least 25% ownership interest is easy to identify, but substantial control is kind of vague. Basically, whoever has the greatest authority over the strategic management of the company should be included on this report. This will likely be your President or CEO.

You need copies of their driver’s licenses or passports because you actually have to submit those copies to the government along with the BOI report.

You’ll also need to include their residence address, date of birth, and identification number.

But wait, there’s more.

Even the person completing the application (like your secretary, treasurer, or HR professional) must include all of that same information and copy of driver’s license or passport, along with the company’s EIN, Tax ID, and state of first formation.

Because the employees who might have to fill out this information do not want to provide their private information to the government, that right there is one of the major reasons that companies are outsourcing this filing.

How Much Does it Cost?

If you choose to file this document on your own, then FinCEN estimates that it will take you somewhere between 1.5 hours to 10.8 hours. Yeah, they really nailed that time down, didn’t they? However, that includes the time necessary to read...

Music:
Unicorn Heads – Your Suggestions
Music provided via YouTube Studio Audio Library

Chapters:
00:00 – Intro
00:48 – Are You at Risk?
01:50 – When Must You File?
02:38 – What Must you Files?
04:09 – How Much Does it Cost?
05:17 – Education is Key

[JackBWatkins]

You are providing a great service to small businesses. I am retired now and sold my company, but things like this always drove me nuts.

[scottyhtown]

Hmmm. I have a business. A very small business. Love the scare tactics. The lawyers and CPA’s are getting rich. Took me 5 minutes to file online on the phone with my lawyer …. Wanted to charge me $400. I told her I just did it 😂 I can just see the press when thousands of honest small business owners are being thrown in jail. Rediculous scare tactics

[soccersprint]

Shut down FINCEN and BOI. Those scare tactics are the Hallmark of a shady evil operation.

[trentvlak]

How does the Constitution authorize this?

[EvnEr]

I’m italian and the father of my grandfather was a Us Citizen, can I request Us citizenship by descent?

[florinivan]

So what was the logic of this law?Combat corruption?Probably. But it seems more like someone wanted to eliminate possible future competition by primarily strangling small businesses. It also seems weird that you have to give this much intel to government agencies about who's in charge. It has some vague orwellian implications.

[debbie]

@MatthewHarrisLaw I have a question that came about due to your question on the quiz on the Community Page.
(See what I did there? Advertising the quiz!)😂
Now seriously, say someone made a donation to President Joe Biden, but didn't want to back Vice President Harris, would or could they get the donation back?
Just curious.