Oh BOI!

I do not know about you, but my main goal in life right now is trying to buy my groceries without taking out a second mortgage on my house. In this noble pursuit I have tried a variety of methods to save: buy in bulk, only shop the sale, clearance items for produce or bakery items, food waste reduction apps, multiple stores, and finally just realizing my best bet was to stay out of the store completely. This means I am trusting my fruit and vegetable selection to someone else which has come with mixed results and sometimes having to throw out the entire spoiled bunch.

Unfortunately, just like buying bulk fruit, “one bad apple can spoil the bunch,” and we live in a world where enough apples have gone bad by committing financial crimes to make the rest of us spoiled. While we can debate the principles of fairness and justice, the Treasury Department has released their solution to sorting out the bad business apples.

Welcome, most likely, to your first interaction with the Financial Crimes Enforcement Network, or FinCEN for short. Now that agency name makes an impact!

You may have heard the acronym B.O.I. floating around on the internet, in the news, or from other professional organizations. Take a few deep breaths, things are about to get intimidating and a bit complicated.

FinCEN BOI stands for Financial Crimes Enforcement Network Beneficial Ownership Information. It’s a system set up by the U.S. government to keep track of who actually owns and controls businesses.

The above mentioned “bad apples” typically use someone else’s name or a made-up business to commit their bad acts. This makes it hard for law enforcement to track them down. The BOI system helps prevent this by making sure the real people behind businesses are known. I will leave the debate about privacy, law enforcement, or any other political topic to your imagination. My purpose here is to share information, please do not shoot the messenger.

First, penalty for not complying with this reporting is substantial, and can come under civil and/or criminal law, which means there is not a lot of room for forgiveness or abatement.

Civil Penalties for Non-Filing: Companies that fail to file their BOI report can be fined up to $500 for each day the violation continues uncorrected. There is no limit set on this penalty, it is $500 per day until the Original or Updated Report is filed. (See later section on Updating the Report) Example: 1 day late $500; 30 days late $15,000; 6 months late $91,500; and so on.

Criminal Penalties for False Information: Up to $10,000 and/or imprisonment for up to two years.

Breathe.

 In.

Out.

Another.

In.

Out.

Pause here and continue to breathe until the flash of emotion passes. I will wait…

Now that we have the horrifying information out of the way and everyone has had a bit of cardiac exercise, let’s talk particulars.

Please note that Saye & Associates, LLC will not be filing any BOI report for any client. We are providing basic information and steps to navigate the reporting process. If you have any questions regarding beneficial owners and/or reporting, please contact an attorney.

Basic Information

Beneficial Owner under the Corporate Transparency Act (CTA):

You are considered a beneficial owner if you directly or indirectly own or control at least 25% of the ownership interests of a company.

Or

If you exercise substantial control over a company. Examples given include holding a senior officer position such as President or C-Suite Executive or having significant decision-making authority regarding the company’s finances, business operations, or structural changes.

Reporting Companies:

Corporations and LLCs are required to report within 30 days of organizing the business. In Michigan, for example, you have 30 days after submitting your articles of organization to LARA to complete your BOI Reporting. There is an extension for any business organized before January 1, 2024, to file by January 1, 2025.

Company Information to Report:

Full legal name, any trade name or “doing business as” (DBA) name, current U.S. address, state or jurisdiction of formation, Employer Identification Number (EIN) or foreign tax ID for foreign entities.

Beneficial Owner Information to Report:

Full legal name, Date of birth, Current address, Copy of a government-issued identification document (e.g., passport, driver’s license), Foreign passport if applicable​

Reporting Requirements Include Updating the Report:

• Changes that require an update to the BOI report include:
  • Change in Beneficial Ownership (i.e. If a beneficial owner sells their stake in the company reducing their ownership below 25%, this change needs to be reported)
  • Change in Control (i.e. If a new CEO or other senior officer is appointed, this change must be reported)
  • Changes in Information of Beneficial Owners (i.e. If a beneficial owner moves and gets a new address, this updated information needs to be reported. Or if a beneficial owner’s driver’s license or passport is renewed)
  • Company Information Changes (i.e. If the company relocates its headquarters, the new address must be updated in the BOI report)

Note: The same 30-Day timeframe and False or Non-Filing penalties apply to the required updating of the report

Let’s do some more calming breaths.

Out.

In.

Alright, we have gone through the worst of it. Now for the part that can be frustrating, logging in to the system. Do you need to breathe again?

How to Navigate the Processes

Step 1:  Sign in or Create and Account with LOGIN.GOV

                Go to https://www.login.gov/create-an-account/

Step 2: Go to https://fincenid.fincen.gov/landing

Step 3: Once you have your LOGIN.GOV account, create a FinCEN ID

Step 4: File your BOI Report: https://boiefiling.fincen.gov/ 

There are 5 pages to complete for the BOIR: 

1. Filing Information 
2. Reporting Company 
3. Company Applicant(s) 
4. Beneficial Owner(s) 
5. Submit 

Items of Note

If this is your first-time reporting, it is an Initial Report. If you are updating your identifying information or documents, then you are updating a prior report.  

If you have not already requested to receive a FinCEN ID, you may do so in step 3. Once you have your FinCEN ID, you can enter that ID when asked and it will auto populate your personal information.  

I recommend setting up your FinCEN ID to become familiar with the system. It is a lot less intimidating than just jumping into the reporting.

Be sure to keep your FinCEN ID up to date with the most current personal information. CAUTION: Updating your FinCEN ID does NOT automatically update your BOI Report. Be sure to update BOTH items to stay in compliance, remember, you have 30 days.

Whoa, that is A LOT of information. Maybe read through it again section by section once your very natural emotional response wears off. If you have more questions about this reporting requirement, please contact an attorney.

I am going to go research the new Department of Labor rules. I’ll be back soon!

Til then, you know where to find me.

~Amy