If you own a small or mid-sized business in Illinois, a new federal requirement may affect you. In 2021, Congress passed the Corporate Transparency Act, designed to promote transparency and prevent illicit activity by requiring businesses to report their Beneficial Ownership Information (BOI). This requirement is now in effect, and it’s important to understand how it might impact your business.
What is the Corporate Transparency Act?
The Corporate Transparency Act requires certain businesses to report their beneficial owners — individuals who own or control a business — to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of Treasury. This is aimed at preventing bad actors from using shell companies to hide ownership and engage in illegal activities.
Who Must Report?
Your business may need to file a BOI report if it is:
- A corporation, LLC, or other entity registered with the Illinois Secretary of State’s Department of Business Services
- A domestic or foreign corporation, LLC, or other business entity with fewer than 20 U.S. employees and less than $5 million in gross receipts or sales
Reporting Exemptions
FinCEN provides 23 exemptions from reporting. These include publicly traded companies, tax-exempt non-profits, and large operating companies that meet specific criteria. A full list of exemptions can be found on FinCEN’s website.
When Is the Deadline?
For businesses registered before January 1, 2024, the deadline to file is January 1, 2025. If your business registered on or after January 1, 2024, you must file a BOI report within 90 days of receiving confirmation of incorporation.
How to File a BOI Report
BOI reports are filed electronically through FinCEN’s website, which provides confirmation once a report is submitted. It’s essential to file by the deadline to avoid penalties, which can include fines and even imprisonment for non-compliance.
What Happens If You Don’t File?
Failure to file a BOI report could lead to serious penalties. Civil fines of up to $500 per day, and criminal penalties including up to two years of imprisonment and fines of up to $10,000, may apply to businesses that fail to comply.
Need Assistance?
If you’re unsure whether your business is required to file or need help navigating the process, our firm is here to assist you. Schedule a consultation today to ensure your business stays in compliance with these new regulations.
For more detailed information, watch my latest video on this topic [link to video].
Beware of Scams
Remember, this is a one-time federally required filing, and the process is done online through FinCEN’s secure website. Be cautious of scams—if you receive unsolicited calls or emails asking for your information, they could be fraudulent. Don’t risk penalties—get compliant now! Reach out if you have questions or need help with your BOI report.