UPDATE 12/4/2024: District Court Places Injuction on Enforcement of the CTA.
On December 3, the U.S. District Court for the Eastern District of Texas placed a nationwide preliminary injunction on the enforcement of the Corporate Transparency Act (CTA).
This decision prevents the Financial Crimes Enforcement Network (FinCEN), a division of the Treasury Department, from implementing the Beneficial Ownership Information (BOI) Reporting Rule outlined in the CTA.
The lawsuit claims that the CTA goes beyond Congress’s regulatory authority under the Commerce Clause, deeming it unconstitutional.
New Beneficial Ownership Information (BOI) Reporting Requirements for 2025
As January 1, 2025, approaches, businesses and property owners in the U.S. are preparing for a new deadline.
The Financial Crimes Enforcement Network (FinCEN) has introduced the Beneficial Ownership Information (BOI) reporting requirement.
This requirement is part of the Corporate Transparency Act (CTA). It asks some companies in the United States to share important details about their beneficial owners. They must also provide ownership information to FinCEN.
Certain un-exempt businesses must submit the Beneficial Ownership Information (BOI) Report. They must report their beneficial ownership information by 01/01/25.
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Investments & Real Estate Assets
If you own a business or investment properties following this is crucial. You need to know the BOI filing requirements to protect your business.
This process includes submitting reported information on your legal entity and its ownership as required by law.
Here’s what you need to know and how Allegiant Management Group can help you navigate this process.
What is Beneficial Ownership Information (BOI) Reporting?
The BOI reporting requirement mandates that certain businesses, including many investment property owners, report beneficial ownership details to FinCEN.
By requiring this, FinCEN wants to make business ownership clearer. This will help prevent illegal activities from hiding in anonymous business structures.
This Beneficial Ownership Information Report (BOIR) will require specific ownership interest's data and personal information for compliance. Importantly, FinCEN will keep this information secure and allow access only to authorized parties.
Who qualifies as a beneficial owner?
A beneficial owner is anyone who holds 25% or more ownership or exercises significant control over the entity. If a partner controls at least 25 percent of the business, you must submit your BOI report.
They do not have to be involved in day to day operations. Including any small business reporting profits to the Department of the Treasury.
Who Must File BOI Reports?
The Beneficial Ownership Reporting rules state that most small businesses. Including corporations, a sole proprietorship, a general partnership, and LLCs (limited liability company), must file a standard BOI form. You can submit this online on the FinCEN website.
Certain entities are exempt, including publicly traded companies and some regulated industries. DBA companies (registered to do business as) will need to supply as well, unless exempt.
These exemptions typically apply to entities already subject to other forms of reporting. Exemptions include:
- Publicly traded companies
- Certain regulated entities (e.g., banks, financial institutions, and insurance companies)
- Inactive entities meeting specific criteria
- Charities and nonprofits
What Information Must Be Reported?
Each BOI requires specific information about beneficial owners, such as:
- Full legal name
- Date of birth
- Residential or business address
- Identification number (e.g., driver’s license, passport) and issuing jurisdiction
Once you collect this information, you must submit it accurately, as errors could lead to penalties. Keeping this information on record with FinCEN is an ongoing responsibility for business owners.
Anytime a change in ownership occurs, someone must make updates to reflect accurate ownership.
Why Compliance Matters for Businesses and Investors
For investment property owners, compliance with filing requirements adheres to federal law and shows a commitment to transparency.
Reporting beneficial ownership information is key to keeping your legal entity compliant.
You can access the BOI form on FinCEN’s website once you have set up an account. The Beneficial Ownership Information deadline is January 1, 2025.
Staying compliant is important to meet the BOI filing deadline. Missing this deadline could lead to a daily penalty of up to $500.
BOI compliance is a chance to check that your ownership structures are clear. It also helps ensure that you clearly define roles within your entity.
Failing to file your beneficial ownership information (BOI) report could put your business at risk. Not only from financial penalties but from a loss of reputation if found non-compliant.
Florida entities must report beneficial ownership information just like other required entities in the United States.
How Allegiant Management Group Can Support Your Compliance Efforts
Allegiant Management Group (AMG) offers a range of services to support investment property owners, including:
- Entity Structuring Guidance: Insights to help you meet regulatory requirements, from initial formation to ongoing adjustments in ownership.
- BOI Reporting Assistance: Guidance in gathering and submitting accurate information for your initial BOI filing. AMG can help you navigate every step, ensuring that your reporting is complete and compliant.
- Ongoing Compliance Support: Continuous support as laws evolve, helping you adjust and respond to regulatory changes. This ensures that your filings stay up to date.
- Investment Property Management: We offer complete property management services. This allows you to focus on your investments while AMG takes care of daily management.
How to Prepare for the January 1, 2025, Deadline
- Identify Beneficial Owners – Review your ownership structure to identify individuals with significant ownership or control.
- Collect Required Information – Gather accurate details, ensuring all records for beneficial owners are complete and up to date.
- Confirm Exemption – Determine if your entity is exempt. If so, document this exemption carefully to avoid any issues.
- Submit Your Report – File through FinCEN’s platform by the deadline. Newly created entities have 90 days to file their initial report.
- Maintain Up-to-Date Records – Keep your BOI report updated if ownership changes, filing amendments as needed.
Preparing early ensures you have time to address any issues.
You should start gathering the required information well before the deadline to avoid last-minute complications.
Penalties for Non-Compliance
Non-compliance with BOI requirements can lead to fines and, in severe cases, criminal penalties.
Financial impacts can also affect your investment returns and reputation.
If you file a report incorrectly or late, you may face penalties.
Make sure to document any changes in creation or registration. You will document with a Secretary of State. This applies to all reporting companies or entities created or registered before January 1, 2024. A company created or registered before 01/01/24 must comply.
The 2024 public notice for Beneficial Ownership filing caused some disagreement. However, there is no way to avoid it without facing consequences.
Get Prepared for 2025
Getting ready for the January 1, 2025, BOI deadline helps you stay compliant. This way, you can focus on growing your real estate portfolio.
BOI filing Florida property management company Allegiant Management Group is committed to assisting investment property owners with compliance needs and reporting company created within timelines required.
If you own investment properties and need assistance, Allegiant Management Group is here to help.
E-File Your BOI
You can self e-file your Beneficial Ownership Information Report directly on the FinCEN website.
If you require assistance many business attorneys are offering this service to help keep you complaint.
How can Allegiant Management Group assist with BOI compliance?
Allegiant Management Group offers guidance on BOI reporting, entity structuring, and ongoing BOIR compliance support.
Don't wait until 2025 to file your report.
If you own property or invest in real estate, contact us today. We are happy to help you follow this new ruling.
WATCH: BOI Compliance & Reporting Explained
For a quick overview on the upcoming deadline for Beneficial Ownership Information, check out this helpful video:
FAQs About Reporting & Compliance
Who qualifies as a beneficial ownership under the new BOI requirement?
A beneficial owner is anyone holding 25% or more ownership or having substantial control over the entity. Example: Limited Liability Company LLC.
What information should we include in the report?
You need to provide the full legal name, date of birth, street address, and ID number of beneficial owners
What are the penalties for failing to file a BOI?
Failure to file can result in fines and, in severe cases, criminal penalties.
Are any entities exempt from BOI filing?
Yes, certain entities like publicly traded companies, banks, and nonprofits are exempt. Other corporations limited liability companies, and other required entities are not exempt.
Disclaimer: This content is for information purposes only and does not constitute legal or financial advice. Consult a legal professional for advice specific to your situation.
Blog Updated: 12/5/24
