It’s alarming that many businesses remain unaware of the obligation to file a Beneficial Ownership Report under the Corporate Transparency Act. What happens if your business misses this crucial requirement?
Key Points:
- Treasury Secretary Janet Yellen reported 100,000 companies complied with the new rule by disclosing their beneficial owners since Jan. 1.
- A significant increase in registrations is required to meet this year’s target of 32.6 million companies.
- The newly implemented BOI Reporting Rule aims to expedite investigations into illicit financial activities.
The Corporate Transparency Act was passed in January 2021, with the aim of increasing transparency in businesses by requiring them to disclose who really owns them. This is done with a document called a beneficial ownership information report. This law is designed to combat illegal financial activities like money laundering and aiding criminals.
Now, businesses must be aware of when they need to submit their Beneficial Ownership Information (BOI) report. However, the initial statistics are below the projected figures, with only 100,000 companies having registered so far.
Deadlines for Filing Beneficial Ownership Information form
Businesses must be aware of the deadlines for filing the Beneficial Ownership Information form.
Furthermore, the reporting deadlines vary depending on the company’s formation date. In addition, some entities have as little as 180 days from the start of the Corporate Transparency Act to submit their BOI report.
Beneficial Ownership Report Filing Dates:
- Reporting companies created before Jan. 1, 2024, will have until Jan. 1, 2025, to submit beneficial ownership information (BOI) to FinCEN.
- Reporting Companies created after Jan. 1, 2025, will have 30 days from creation or registration.
Without a doubt, understanding these deadlines is essential for businesses to ensure compliance and avoid potential penalties.
Penalties for Non-Compliance with the Corporate Transparency Act
It’s crucial for businesses to follow the rules, but unfortunately, many don’t realize they need to submit a Beneficial Ownership Report. If they miss this requirement, they could face hefty fines of up to $500 per day, with a maximum of $10,000, and even imprisonment.
It’s concerning that despite efforts by organizations like FinCEN to spread awareness, many businesses are still unaware of their obligations. This shows the urgent need for improved communication to ensure all businesses understand and comply with the law.
Unaware of Beneficial Ownership Reporting
Treasury Secretary Janet Yellen stressed the urgent necessity of tightening regulations to safeguard against the United States becoming a hub for illegal funds. She emphasized, “We’re closing a loophole and sending a clear message: The United States is not a haven for dirty money.”
However, since the rule’s enactment on January 1, only a fraction of businesses—approximately 100,000—have reported their ownership information. Even so, this sluggish progress raises concerns about meeting the projected 32.6 million registrations this year, highlighting the need for heightened awareness and participation.
Outreach Efforts for BOIR Compliance
So, to try and help businesses comply with the new rule, the government has launched various projects, including webinars and partnerships with federal and state agencies. In brief, these projects and collaborations aim to educate businesses about their beneficial ownership reporting requirements.
However, initial registration numbers have fallen short of expectations, making it challenging to reach the 2022 prediction of 32.6 million business registrations. FinCEN forecasts an additional 5 million companies reporting annually over the next decade.Nonetheless, “As more businesses learn if they are required to report under the new law, we expect filing numbers to grow exponentially” a spokesperson for the Treasury stated.
Beneficial Ownership Report Assistance from FincenFetch
Despite the challenges of compliance, businesses can find support from FincenFetch. This platform stands ready to aid firms in fulfilling their regulatory duties. We provide a comprehensive solution designed specifically to streamline the registration process, ensuring seamless compliance with the new regulations.
To summarize, here are some key points about how FincenFetch can benefit firms and their clients:
Efficiency
With advanced validation checks and data verification techniques, firms can ensure accurate submissions. This minimizes errors and discrepancies, reducing the risk of rejections and penalties.
Accuracy
A streamlined process saves firms time and resources. By automating tasks and providing simple workflows, it enables quick and efficient registration.
Timeliness
Meeting deadlines is crucial for compliance. Timely reminders and notifications ensure that firms stay on track with their reporting obligations.
Comprehensive Support
Comprehensive support is provided throughout the process. From setup to submission and beyond, guidance and assistance are offered every step of the way.
Schedule a demo with the FincenFetch team today to learn how we can help your business navigate the reporting requirements. With our efficient, accurate, and comprehensive platform, firms can simplify their filing efforts and focus on their core business activities.
Take-away
Altogether, the Corporate Transparency Act is crucial for making businesses more transparent and fighting financial crimes. However, many businesses are slow to comply, and some aren’t even aware of their obligations. Hence, it’s important to keep educating and assisting businesses to ensure they follow the rules, protecting our financial system and national security.
Remembering the deadlines for filing the Beneficial Ownership Information (BOI) report is important for most. Not meeting these deadlines can lead to hefty fines and even jail time. Use our exemption tool now to see if you need to file a report or if your company qualifies for one of the 23 exemptions under the Corporate Transparency Act.
By FincenFetch, Firms can help their client’s businesses achieve compliance and create a safer and more transparent business environment for everyone involved.
