Beneficial Ownership Information Filing

The BOI report is a new requirement for LLCs and other business entities, aimed at increasing transparency about who owns and controls the business. This is part of a broader effort to prevent money laundering, tax evasion, and other financial crimes.
 
The report requires businesses to disclose specific details about their beneficial owners — those individuals who ultimately own or control at least 25% of the entity or have significant influence over its decisions.
 
The penalties for failing to file the Beneficial Ownership Information (BOI) Report or for filing inaccurate or incomplete information can be quite severe. The Financial Crimes Enforcement Network (FinCEN) oversees compliance with these reporting requirements under the Corporate Transparency Act (CTA), and the penalties are designed to ensure businesses take the filings seriously.
 
Here’s a breakdown of the penalties:
 
1. Civil Penalties
Fines of up to $500 per day: If a business fails to file the BOI report on time or provides inaccurate information, it can be fined up to $500 for each day the report is late or incomplete.
These fines can accumulate quickly, especially if there is a significant delay in filing, leading to substantial financial penalties over time.
 
2. Criminal Penalties
Willful failure to file: If a business or individual willfully fails to file the BOI report or knowingly submits false information, they may face criminal penalties.
Fines up to $10,000: Willfully failing to report, or reporting false information, can result in a fine of up to $10,000.
Imprisonment: In addition to fines, individuals may face imprisonment for up to two years for willful violations.
 
3. Penalties for Providing False or Fraudulent Information
Businesses or individuals that knowingly provide false or fraudulent information on the BOI report can also face serious consequences, including:
Up to $10,000 in fines.
Up to two years in prison.
 
How to Avoid These Penalties
Timely Filing: Ensure that your BOI report is submitted by the required deadline.
Accurate Information: Make sure the information about your beneficial owners is accurate and complete.
Work with a Professional: Consider hiring a professional firm to help you file the BOI report properly, ensuring compliance and avoiding potential penalties.