As the new year quickly approaches, business owners within the La Grange Business Association and throughout Illinois should be aware of an important upcoming deadline. The Beneficial Ownership Information (BOI) reporting requirement, created under the Corporate Transparency Act of 2021, mandates that many small and mid-sized businesses must report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury. This requirement is designed to increase transparency and help prevent illicit activities through hidden ownership structures.
Who Needs to Report?
The BOI reporting requirement applies to:
- Corporations, limited liability companies (LLCs), and other entities registered with the Illinois Secretary of State’s Department of Business Services.
- Domestic or foreign entities with fewer than 20 U.S. employees and less than $5 million in gross receipts or sales.
- Who Is Exempt? FinCEN has outlined 23 specific exemptions. These include publicly traded companies, certain large operating companies, and tax-exempt not-for-profit organizations. A comprehensive list of exempt entities can be found on FinCEN’s FAQ page.
What Is a Beneficial Owner?
A beneficial owner is defined as any individual who owns at least 25% of the business or has substantial control over it. This could include senior officers, key decision-makers, or individuals with the power to appoint or remove officers.
Important Filing Deadlines
- Businesses registered before January 1, 2024: Must file a BOI report by January 1, 2025.
- Businesses registered on or after January 1, 2024, and before January 1, 2025: Must file a report within 90 calendar days of confirmation of incorporation or organization.
- Businesses registering after January 1, 2025: Must file within 30 calendar days of receiving confirmation.
Additionally, if you need to update or correct any information previously submitted, changes must be reported within 30 days.
How to File
Reports are filed electronically through FinCEN’s website. After successful submission, businesses receive a confirmation of receipt.
Consequences of Non-Compliance
Failure to comply with the BOI reporting requirement could result in significant penalties. Businesses and individuals who knowingly violate the requirements may face civil fines of up to $500 per day and criminal penalties, including up to two years of imprisonment and fines up to $10,000.
Protect Yourself from Scams
It is crucial to remain vigilant against scams. Filings are completed online, and FinCEN does not send unsolicited requests. Be wary of any emails, letters, or phone calls asking for your information under the guise of complying with these regulations. If you encounter suspicious activities, report them to the Better Business Bureau’s Scam Tracker or the FBI.
Where to Find Help
The Illinois Secretary of State and the Illinois Department of Commerce and Economic Opportunity’s (DCEO) Small Business Development Centers (SBDCs) offer training and assistance for free. You can find an SBDC near you on the DCEO website.
For detailed information, visit FinCEN’s website at www.fincen.gov/boi or contact the Illinois Secretary of State’s Department of Business Services at (800) 252-8980.
Final Reminder
With the January 1, 2025, deadline fast approaching, ensure your business remains compliant and avoid potential penalties. Take advantage of the resources available and act now to stay on track.