Don’t Get Caught Off Guard: Important Deadline Approaching for Business Owners
Are You Ready for the Upcoming BOI Report Deadline?
Running a business is already challenging—don’t let compliance headaches make it harder. Imagine this: You’re focused on growing your business, everything is running smoothly, and then out of the blue, you’re hit with hefty fines because of a missed compliance deadline. Sounds stressful, right?
That’s why it’s crucial to be prepared for the upcoming Beneficial Ownership Information (BOI) report deadline under the Corporate Transparency Act (CTA).
Let’s break down what these reports are, who needs to file, and the penalties for non-compliance. We’ll also touch on the unique complications for those in community property states.
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA) is a new law designed to enhance transparency in business operations. It requires businesses to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The goal? To prevent illegal activities like money laundering and terrorism financing.
Who Needs to File BOI Reports?
The CTA applies to a wide range of businesses, including:
Corporations and LLCs: Most are required to file BOI reports.
Small Businesses: Even small businesses must comply unless specifically exempted.
New and Existing Entities: Both newly formed and existing entities need to file.
Certain entities such as large operating companies and regulated entities may be exempt.
What is a BOI Report?
A BOI report identifies the individuals who have significant control over your business, including:
Owners with a significant percentage of shares.
Individuals with substantial decision-making power.
Key stakeholders in the management of the business.
The Importance of Compliance and Potential Penalties
Filing a BOI report is more than just paperwork—it’s an important step in ensuring your business remains transparent and compliant with regulations. It helps authorities ensure that business operations are legitimate. But beware, failing to comply can result in severe penalties:
Civil Penalties: Substantial fines for failure to file or providing false information.
Criminal Penalties: Willful violations can lead to criminal charges including imprisonment.
Filing Deadlines and Updates
The filing deadlines are based on when your company was formed or when changes occur, not on fixed dates or tax filings.
Existing Companies (formed before Jan. 1, 2024): Have until January 1, 2025, to submit their initial BOI report.
New Companies (formed between Jan. 1, 2024 - Dec. 31, 2024): Have 90 days from the notice of formation or registration to file their initial BOI report.
New Companies (formed on or after Jan. 1, 2025): Must file within 30 days of formation or registration.
After filing the initial report, all companies must update their BOI information within 30 days of any changes.
Don’t Wait: The deadline is approaching fast—don’t wait until it’s too late to get your BOI report filed.
Complications in Community Property States
If you’re in a community property state, there’s an extra layer of complexity. In these states, the ownership interest of one spouse is generally considered jointly owned with their partner. This means both may need to report their ownership as a joint interest if either owns at least 25% of a business. States with community property laws include:
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Note: This information is not intended as legal advice. Please consult a legal professional for specific guidance.
Why We Care and How We Can Help
At The Purple Group, we understand that navigating compliance requirements like the Corporate Transparency Act can be overwhelming. We’ve helped countless businesses stay compliant and thrive by taking care of the details, so you can focus on what you do best—running your business. Proper compliance is about more than just avoiding penalties; it’s about ensuring your business is set up for long-term success.
Reach Out to Us for Help: Don’t risk costly penalties or the stress of managing this on your own. Contact The Purple Group today, and let us handle your BOI report compliance, ensuring your business remains on track.
