Exemptions and Penalties in BOI Reporting

Exemptions and Penalties in BOI Reporting

What are the exemptions to filing a BOI Report?

The CTA provides a list of 23 exempt entities. These include but are not limited to, publicly traded companies, regulated financial institutions like banks and insurance companies, and companies that meet specific thresholds in terms of employee count and revenue. An entity that qualifies for any of these 23 exemptions is not required to submit BOI reports to FinCEN. Determining whether your company is exempt requires a detailed analysis of your business structure and activities about the criteria outlined in the CTA.

What are the penalties for non-compliance or inaccurate reporting?

Non-compliance with BOI reporting requirements can lead to severe consequences. Willful failure to report complete or updated beneficicial ownership information or willfully providing or attempting to provide false or fraudulent beneficial ownership information can result in civilor criminal penalties.

Civil penalties include fines of up to $500 for each day that the violation continues. Criminal penalties include imprisonment for up to two years and/or a fine of up to $10,000.

Companies need to understand the importance of BOI Reporting and its consequences for noncompliance and ensure complete and accurate reporting. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

Providing false or fraudulent beneficial ownership information can include providing false identifying information about an individual identified in a BOI report, such as by providing a copy of a fraudulent ID, including US or foreign passport, state driver’s licence or state/local/tribe issued ID.

Additionally, a person can be subject to civil and/or criminal penalties for willfully causing a company not to file a required BOI report or to report incomplete or false beneficial ownership information to FinCEN.

For example, if you are a beneficial owner or a company applicant of a company and you refuse to provide information, knowing that a company would not be able to provide complete beneficial ownership information without it, then you may be subject to civil or criminal penalties or both.

Also, if you provide false information to a company, knowing that information is meant to be submitted with the BOI Report, then you can be subject to criminal or civil penalties or both.

Best Practice: Submit complete BOI Reports and update or correct any initial BOI Reports within 30 calendar days of a change or after you become aware or have reason to known of an inacuracy, in order to avoid penalties for non-compliance. Get Started with BOI Report tool for a fast and easy submission. Three simple steps and you are done. No login or signup required.

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