The holiday season brings gifts, and gatherings, and now, thanks to the IRS, a new compliance obligation: Beneficial Ownership Information (BOI) reporting. This new requirement asks businesses, particularly LLCs, LPs, and corporations, to disclose their beneficial owners—the real decision-makers and financial controllers behind the scenes. The intent? To clarify who holds control, helping the government ensure transparency and crack down on potential financial crimes.
For most smaller businesses, this means meeting specific filing requirements before December 31st to avoid penalties. Let’s break down the essentials of BOI, from its purpose to the information required and how to stay compliant without adding too much stress to your holiday season.
What Is BOI Reporting?
BOI reporting mandates that businesses report detailed information on each beneficial owner, including their names, addresses, ownership percentages, and key company information such as the Employer Identification Number (EIN) and business structure. In essence, the IRS seeks a transparent picture of who holds power and control with respect to each reporting entity.
This compliance initiative applies to most small and medium-sized businesses, including LLCs, LPs, and private corporations, although not all are affected.
Who Must Comply?
The businesses required to file BOI reports include most LLCs, LPs, and corporations. However, certain entities are exempt from BOI reporting, including:
- Publicly Traded Companies – These companies already report under other regulations.
- Government Entities – Exempt from this requirement as they operate under different oversight.
- Banks and Credit Unions – Regulated by existing federal and state laws.
- Large Operating Companies – Companies with more than 20 full-time employees and $5 million in revenue do not need to file BOI reports.
- Certain 100% Owned and Controlled Subsidiaries – Wholly owned and controlled subsidiaries of exempt entities are themselves exempted from BOI reporting requirements.
Steps to File Your BOI Report
If your business falls within the reporting requirements, here’s how to ensure a smooth, compliant filing process:
- Gather Your Information
Collect details on each beneficial owner, including full names, actual addresses (no P.O. boxes), ownership percentages, and titles, as well as your business’s EIN and structure. - Complete the Form
Submit your report through FinCEN’s online portal. First-time filers will need to create an account. The submission must be completed by December 31st to avoid potential fines and penalties. - Stay Updated
BOI reporting is not a one-time event; updates are required if there are changes in ownership or control. Ensure that you revisit and update your report as necessary.
FAQs on BOI Compliance
What happens if I miss the deadline?
Missing the BOI filing deadline can result in significant penalties, including fines and, in extreme cases, criminal charges.
Is BOI information public?
No, BOI data is not public. It is accessible only by law enforcement and certain other government agencies.
What if I am unsure about beneficial ownership details?
If you’re uncertain, consulting a legal professional can prevent compliance issues down the road.
How WG Can Assist with BOI Compliance
BOI reporting seems straightforward on the surface, but it can become complex when managing multiple owners or intricate ownership structures, and when it is not clear which persons and entities have “substantial control” over the entity in question. For example, a CFO is deemed to have substantial control even if the CFO has no equity or other indicator of ownership or control.
WG has extensive experience guiding businesses through compliance processes, ensuring that reports are accurate, timely, and fully compliant. Let us handle the details so you can focus on running your business with confidence.
Final Thoughts: Keep Compliance Simple with WG
BOI reporting may seem like another complex requirement, but it doesn’t have to disrupt your routine. With the right guidance, you can complete your reports accurately and on time, so you can focus on what matters most: running your business confidently and efficiently. Let us help you navigate the process so that compliance is one less thing on your to-do list.