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If your business was established or registered between January 1, 2024, and January 1, 2025, you may need to file a Beneficial Ownership Information (BOI) report. This new mandate, introduced under the Corporate Transparency Act (CTA), is designed to promote financial transparency and combat illicit financial activities. What is Beneficial Ownership Information (BOI)? Beneficial Ownership Information (BOI) reporting involves disclosing information about the real individuals who own, control, or benefit from a company. Under the Corporate Transparency Act (CTA), all U.S. entities and foreign entities registered to do business in the U.S. are required to submit detailed ownership information to FinCEN. The primary goal is to create a centralized registry of beneficial owners, accessible to law enforcement and federal authorities to combat illicit financial activities. Do I Have to File a BOI for My Business? Under the CTA, all U.S. entities and foreign entities registered to do business in the U.S. must submit ownership information to FinCEN. However, 23 different entity types are exempt, such as publicly traded companies, banks, accounting firms and some non profit organizations.   For more information on companies who need to submit a BOI report and those exempted, visit this Frequently Asked Questions page by FinCEN. What Happens If I Don’t File a BOI? Failing to file the BOI report can lead to serious consequences, including: Financial and Criminal Penalties The CTA stipulates severe penalties for businesses that fail to file BOI reports or provide false information. Civil penalties include fines of up to $500 per day of non-compliance, which can accumulate quickly. Additionally, criminal penalties can lead to up to $10,000 in fines or even imprisonment. These penalties can have a devastating financial impact on small businesses and startups. Business Disruptions Non-compliance can trigger audits, investigations, and enforcement actions that disrupt regular business operations. These processes often require significant time and resources, distracting the company from its core activities. Furthermore, a business found in non-compliance could face a freeze on its financial accounts, suspension of operations, or the loss of key business licenses. BOI Filing Deadlines The deadline for filing Beneficial Ownership Information (BOI) reports depends on when your business was created or registered: What Is the Best Way to File a BOI Report? There are several ways to file your BOI report.  You can file the BOI report directly with FinCEN (Financial Crimes Enforcement Network) online through their secure portal. If you use an online cap table software tool like Carta you probably have a lot of required information already gathered and can easily file from there.  There are also specific software services that just do BOI compliance.   MontPac’s Recommendation At MontPac, we understand the complexities of BOI filing and the potential complications of non-compliance. We recommend that businesses file their BOI reports early and consult with their legal advisors if they encounter uncertainties. Filing the BOI report is more than just a regulatory requirement—it’s a crucial step in protecting your business and contributing to a more transparent financial system. Missing the deadline or making errors in your filing can have costly consequences. For guidance, resources, and to ensure you’re fully compliant, reach out to our team—we’re here to support your business and help you stay in compliance. You can find more information about the filing requirements directly on the FinCEN’s official BOI compliance page.