Key Unseen Factors for Effective BOI Reporting
![Men in suits walking down a hallway](https://mbe.cpa/wp-content/uploads/2024/06/Men-in-suits-walking-down-a-hallway.jpg)
Day-to-day, it’s common to gloss over minor details – misplacing car keys, forgetting passwords, missing birthdays. While these slip-ups may be excusable, the margin for error narrows significantly in business, where small oversights can lead to significant consequences. Thus, you must stay up to date on new legal requirements and prepare in advance so you’re not caught off guard.
Webinar
Key Steps for BOI Filing and Compliance for Small Businesses
Thursday, September 12, 2024
1:00 PM | (UTC-05:00) Central Time (US & Canada)
Featured Topics:
Recently, the beneficial ownership information (BOI) reporting requirement beginning January 1, 2024, has sent businesses scrambling for needed resources and documentation. This regulatory requirement is found under the Corporate Transparency Act (CTA), which aims to prevent money laundering and other illegal activities.
The BOI reporting deadlines vary based on your business’s establishment date. Companies set up before January 1, 2024, should submit their reports by January 1, 2025. Established companies between January 1 and December 31, 2024, must file within 90 days of formation, while those formed in 2025 and beyond have a 30-day deadline post-organization.
You may have prepared for the above dates, but initial filing isn’t the only thing you should worry about. As changes occur within your organization or amongst beneficial owners, unanticipated additional requirements may surface. Things you never thought you would have to track.
In this blog post, our goal is to assist you in recognizing often overlooked details that could prove crucial for maintaining compliance with BOI reporting regulations. But before we dive into that, let’s make sure you know the basics first:
- Does the requirement cover my company?
- Who are beneficial owners?
- What information should you report?
- Does my business qualify for an exemption?
What You May Be Overlooking: Maintaining Compliance
The changes we laid out below typically happen in your business. Details you did not know are actually triggers for the updated filing of BOI reports. You’ll be more surprised that the filing period can be as short as 30 days.
1. Changes in Beneficial Ownership
Monitor changes in the percentage of ownership or the structure of your business, such as the addition, removal, or death of beneficial owners or the appointment or resignation of directors or officers.
Remember that beneficial ownership does not only cover those holding ownership interests but also individuals exercising independent judgment and making meaningful and binding decisions.
2. Updates in Beneficial Owners’ Information
Your beneficial owners may go through milestones like marriage or moving into a new home. These life events essentially change information like their name or home address, necessitating the update of your BOI report.
3. Change in Legal Entity Type or Registration of a New Business Name
If your business undergoes a change in legal entity type, such as converting from a sole proprietorship to a corporation or registering a new business name, it is essential to update the BOI information to reflect the new entity structure accurately.
4. Qualifying for Exemption
There may be situations where, following the initial filing, changes occur within your business that make you eligible for exemption from the reporting obligations. In such instances, it is necessary to submit an updated report affirming that your company no longer falls under the category of a reporting entity.
Best Practices for Effective BOI Reporting
![People's Hand Close-up Holding a pen](https://mbe.cpa/wp-content/uploads/2024/06/Peoples-Hand-Close-up-Holding-a-pen.jpg)
There’s always a risk of slip-ups, especially when managing everything manually. That’s why it’s crucial to set up practices that integrate the review and update of your BOI into your processes.
Documentation and Record-Keeping
Maintain proper documentation and record-keeping practices to support the changes made in the BOI filings. This includes tracking relevant agreements, share purchase documents, and any other evidence of ownership or control.
Communication with Beneficial Owners
Establish effective communication channels with beneficial owners to secure prompt updates and anticipate any forthcoming changes in their information.
Ongoing Compliance Monitoring
Implement regular compliance monitoring procedures to make sure the BOI filings remain accurate and up-to-date. This involves conducting periodic reviews of the BOI information and promptly addressing any discrepancies or updates required.
Engage a Business Advisor
You may want to do everything on your own. However, new regulatory requirements can lead to challenges in interpreting and applying specific facts. You may encounter difficulty in determining your eligibility for exemption or identifying the necessary trigger points for filing updated BOI reports. A knowledgeable business advisor can provide valuable assistance in understanding these complexities, setting up an ongoing compliance monitoring process, and making sure that you pay attention even to the tiniest of details.
As a Partner at MBE CPAs, I have dedicated significant time and effort to understanding the nuances of the Corporate Transparency Act. Given this knowledge, I am fully capable of guiding you through the regulatory requirements, including the critical Beneficial Ownership Information Reporting obligations. My team and I stand ready to offer the resources and expertise necessary to ensure your continued compliance. Let us provide the support you need to navigate these regulations efficiently and effectively. Reach out today to leverage our expertise for your compliance needs.
Do you have questions about filing a BOI for your business? MBE can help.
"*" indicates required fields