Many businesses are receiving notifications that they need to file a Beneficial Ownership Information Report. This is a new requirement and is upsetting to many small business owners as it is another unpaid requirement placed on them by the government to continue to do business.
There are companies that offer to help you do this for a fee, but it does not appear to be difficult to do by yourself. You can go to https://fincen.gov/boi and follow the directions there to file the form for free.
The requirement is currently on hold as a result of Top Cop Shop, Inc. v. Garland (E.D. Texas, December 3, 2024). Previous to this decision, while the law was still in force, compliance with the requirement was only around 10 percent. The law does have significant penalties for non-compliance; there are civil fines of up to $591 per day for each day the report is late and criminal fines of $10,000 and/or up to two years in prison.
The purpose of this report is to give the government transparency into company ownership by requiring businesses to submit information about the individuals who control the businesses. The goal is said to be to prevent shell companies from shielding those who own them. In theory, this can help identify individuals engaging in suspicious activity with a trade-off of the time and privacy of all business owners.
The requirement was created as part of the Corporate Transparency Act (CTA), which was enacted in 2021. The BOI reporting is managed by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department.
