Oh BOI, What's That?
Nov 20, 2024
Have you ever watched the shell game in action? You take an item, hide it under one of three cups, and randomly and quickly move them around to confuse the participant with hopes they won't find what they're looking for.
Well, criminals do the same thing. They'll create dummy or fake businesses, LLCs, shell corporations, etc. to move their assets around to add extra layers of protection to keep from getting caught. Whether you're a fan of the Netflix series Ozark, DiCaprio's Wolf of Wall Street, or hiding money through shell companies like AIA Car Wash in Breaking Bad, you've likely seen cases in pop culture or the media of shell companies doing bad things to protect bad people.
Congress passed the Corporate Transparency Act and was enacted in 2021 to help deter these shell games that aid terrorism, drug-trafficking, money laundering, and corporate fraud. This Act created a financial reporting requirement called the Business Ownership Information (BOI) to be reported to the Financial Crimes Enforcement Network (FinCEN) which falls under the Department of Treasury. The goal of BOI is to collect ownership information of reporting companies, more described below, to establish who owns what business. Basically it creates a paper trail and exposes potentially bad actors who participate in these schemes.
Who Must File for the BOI?
The BOI is broken down into two distinct sections with one focused on the company being reported and the other with the beneficial owner.
A Reporting Company is basically any company that is not a sole-proprietor. If you're a LLC, a corporation, partnership, multi-member LLC, etc. you must file a BOI. Sole-Props aren't registered with the government and therefore are exempt from BOIs.
Source: FinCEN
There are some other exempt companies from BOI that are not cleaning-related like securities brokers, banks, credit unions, insurance companies, accounting firms, public utilities, etc. They're exempt from BOI because they're already registered due to the nature of other paperwork requirements already faced.
A Beneficial Owner is anyone who has financial control over the company or anyone who owns more than 25% of a company. Those of you cleaning business owners, this should include all of you.
What are the Filing Deadlines?
• Reports were accepted starting on January 1, 2024.
• Reporting companies created or registered to do business before January 1, 2024,
will have additional time — until January 1, 2025 — to file their initial BOI reports.
•. Reporting companies created or registered on or after January 1, 2024, and before January
1, 2025, have 90 calendar days after receiving actual or public notice that their company’s
creation or registration is effective to file their initial BOI reports. Specifically, this
90-calendar day deadline runs from the time the company receives actual notice that its
creation or registration is effective, or after a secretary of state or similar office first provides
public notice of its creation or registration, whichever is earlier.
• Reporting companies created or registered on or after January 1, 2025, will have 30
calendar days from actual or public notice that the company’s creation or registration is
effective to file their initial BOI reports.
What is the cost to file?
FREE! There are some sites that pose in a style similar to an official government site, but they're not. Make sure there's a dot gov link. Some of these 3rd party sites will capitalize on this process and there are some out there who charge hundreds of dollars, when it's completely free to file, and it only takes 5 minutes.
Where do I go to File?
I just registered My Clean Pivot, LLC for the first time at the writing of the post. It did only take 5 minutes to type everything out but it took about 10 tries to upload my driver's license photo. Not sure what the glitch was at the time. I did have a hole stamped in my license due to a renewal last week with a pending new license being mailed out but in the end it was accepted.
Next on Deck: What Are You Thankful For? (Coming soon 11-27-2024)
