Hi!
I'm back, I haven't posted in a few days unfortunately things have been a little busy at work, but I started on another post that should be out pretty soon with some more exciting stuff to discuss. Meanwhile, this news crossed my path and it felt like I should post about it given that my goal with this blog is to document the process of creating my LLC.
Disclaimer: This is not legal advice, you should consult a lawyer about the requirements for your business to file a BOI report. All information in this blog post was gathered from FinCEN, see there for any additional information.
So I found out from a tweet today that there are new federal reporting requirements for small businesses and I wanted to make sure I posted about it because it was news to me and would've completely evaded my sight. Beneficial Ownership Information reports are now required for all non-exempt businesses operating in the US to mitigate financial crimes committed under the label of small business.
The instructions on who needs to report are a little confusing (at least they were for me at first) so I'm going to list them off here. From the FinCEN brochure on the BOI reporting requirements:
Your company may need to report information about its beneficial owners if it 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; or
- a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Now filing this seemed a little scary to me at first, but it's actually not so bad now that I've filled the form out. The main goal here is for the feds to be able to create an accountability trail for small businesses that may be committing fraud or acting as shell companies.
Depending when your company is formed you have different reporting requirements which I'll list off below from the brochure:
FinCEN began accepting reports on January 1, 2024.
- If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.
- If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
- Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
So for my company, I'm not actually required to file until 2025, because I created the LLC in December of last year, but letting something like this go by the wayside would stress me out immensely until I do it so I'd rather get it out of the way now. To access the form you can go to the FinCEN website and file directly from there, or download a PDF and reupload it with the filled-out information.
The process of filing it was very simple for me, but my business is also super uncomplicated so I'd advise you to consult with a lawyer if you're unsure at all about what your business' requirements are. You can also check the FinCEN BOIR FAQ for more information about the filing process.
When you're ready to file you can do it from this site. I needed my address, EIN, and my driver's license to make everything work, it was just a matter of giving them the information relating to the LLC and then the information relating to my identity as the owner. All in all the whole form took about 5 minutes to fill out including the time spent scanning in my driver's license from my phone, if you're reading this blog it's probably just as simple for you to file as it was for me, but still check with a lawyer if you're unsure about how you need to handle it.
I'm seeing a lot of discourse about whether or not the feds should be allowed to require a database of all small businesses in America, what do you think? What are your thoughts on the potential consequences of it?
To be entirely honest, I was kind of surprised this wasn't already a thing that the IRS filled in with data from tax returns. It seems like it's a good thing on the face, but I'm not sure I trust how the data will be used. I'm not well-versed enough in running a business to know what the potential risks could be for small business owners. What do y'all think about it?
Anyway, I hope this helps, I know it's mostly just me collecting the information from the brochure and the site into one place, but I got really nervous when I found out this was a requirement and I'm hoping I can save someone else that stress.
Thanks for reading!
- Dylan