Questions about the BOI Report and Penalties
Q: When is my Beneficial Ownership Information Report Due?
A: A company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report. A company created or registered in 2024 will have 90 days to file after creating the company. A company created or registered on or after January 1, 2025, will have 30 days in which to file after creating the company. All companies should FILE NOW to prevent forgetting to file or a government website crash which prevents you from filing. At $591 per day, the penalty to too great to procrastinate.
Q: What types of companies must file a BOI Report?
A: Corporations, LLCs, limited partnerships, and any other type of entity created by filing with the secretary of state for any US state or territory must file a BOI Report unless they are exempt. Click here to check if your company is exempt.
Q: What should I do if previously reported information changes?
A: If there is any change at all to the information you reported, whether it pertains to beneficial owners (change in who meets the 25% ownership interest threshold, hiring a new officer, an address change or name change of a beneficial owner, etc.) or your company (address change, registering a new business name or DBA, etc.), your company must file an updated report no later than 30 days after the date of the change or face penalties.
Q: What if I have an old company that hasn’t operated in years?
A: It may be exempt from filing. Check if your company is exempt here, where you can find more detail on whether a company is exempt due to inactivity.
Q: Why is the penalty $591 per day?
A: When the Corporate Transparency Act was signed into law in January of 2021, the daily penalty for noncompliance was set at $500 per day. But Congress added an inflation adjuster to the law. The law formally took effect on January 1, 2024. In January of 2024, the Department of the Treasury announced that, with the inflation adjustment, the penalty for noncompliance with the Corporate Transparency Act is now $591 per day. This is in addition to possible criminal penalties of a fine of up to $10,000 and a prison sentence of up to 2 years.
Q: What is noncompliance which results in a penalty of $591 per day plus potential criminal penalties?
A: Per the Corporate Transparency Act, noncompliance is failing to file a BOI Report for a company by January 1, 2024 OR filing an inaccurate BOI Report. The frightening part of this is that any error or inaccuracy in your BOI Report has the potential to subject you to a civil penalty of $591 per day plus a criminal fine of up to $10,000 and imprisonment for up to 2 years unless it is corrected within 90 days of learning of the inaccuracy. It is critical that you file an accurate report and include every person who is or might be a beneficial owner.
Q: But I heard only “willfully” noncomplying results in the penalties?
A: “Willfully” is defined under the Corporate Transparency Act as being a “voluntary, intentional violation of a known legal duty.” Under US Supreme Court precedent, businesses such as yours are charged with knowledge of laws that are published. Ignorance of the law is no excuse. You a presumed to know of this legal duty because it was published in the Federal Register, where federal laws are announced. Even though it has been poorly publicized, if you are presumed to know this legal duty, then it is a voluntary and intentional violation not to comply with it by filing an accurate report on time. Our interpretation is that the daily penalties will apply to all businesses who fail to file on time, provide inaccurate information, or fail to correct a mistake or omission. You should not gamble with your wallet, your company’s wallet, and your freedom by assuming that grace will be applied in the future because this law, as written, will apply the daily penalties to all businesses which don’t comply, and it may apply the criminal penalties, as well. The daily penalty of $591 appears mandatory to us, while the criminal penalties “may” be applied. Failure to fully and completely comply is not worth the risk because the stakes are too high.
Q: Do these penalties apply to the beneficial owners or the business?
A: FinCEN says BOTH. The penalties apply to the individual who provides the inaccurate information to FinCEN, the person who gave inaccurate information to the person who provided the information to FinCEN, and the company. And the penalties apply to both the individuals who were responsible for filing, but failed to do so, and the company. Our read of this is that multiple parties could be fined $591 a day for failing to file or filing an inaccurate report. The owners, senior officers, and other people who substantially control the company could all be penalized $591 per day, each, in addition to the company also being penalized $591 per day.
Q: Could I really land in federal prison for 2 years if I don’t file this report?
A: We don’t know how strictly the federal government will enforce the criminal penalties. It appears safe to assume that you will face a civil penalty of $591 per day for every day that it is late. If you were late two years on filing your report, you would very likely owe the government $431,430. As for imprisonment, only time will tell how willing the government is to enforce this against business owners who don’t file, or file inaccurate or incomplete reports. It would be a very high stakes gamble to not file, hoping that the government does not imprison you. And you would be out hundreds of thousands of dollars in civil penalties. It’s just not worth the gamble. File it correctly before the deadline.
Q: How safe is my information once it is submitted to FinCEN? Who can access it?
A: The federal government tells us it will be very safe. FinCEN will only provide access to federal, state, and local government officials, as well as tribal officials, if applicable, and certain foreign officials. For these governmental officials to obtain this information, they have to submit a request to the US government to obtain this information for authorized activities related to national security, intelligence, and law enforcement. In addition to these governmental officials, financial institutions (banks) will have access only if you give consent. Anyone disclosing your beneficial ownership information unlawfully is subject to very high penalties and imprisonment.
Q: If my questions are not answered on this FAQ, how do I contact the Fuller Law Group?
A: If you are unable to submit your report, or if your question is not answered in the other Frequently Asked Questions on this page, you may send a message to the Fuller Law Group directly by completing the form below. Only questions relevant to the scope of your representation (filing on this website or reporting requirements for your filing) will be answered.