Florida Keys businesses, time is running out for many businesses to comply with the Corporate Transparency Act. This federal law requires specific entities to file a Beneficial Ownership Information (BOI) report with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) at https://boiefiling.fincen.gov/ by Dec. 31.
Failing to meet this requirement can result in civil penalties of up to $500 per day and criminal fines of up to $10,000 or two years in prison.
The law, enacted in 2021, is part of a broader effort to combat money laundering, terrorist financing and other illicit activities by increasing corporate transparency. Here’s what business owners need to know to avoid stiff penalties and ensure compliance.
Who needs to file?
The law applies to many small businesses, including LLCs, S-Corps, partnerships and corporations with fewer than 20 full-time employees and less than $5 million in revenue. These entities must report detailed information about their beneficial owners — individuals with 25% or more ownership or substantial control over the company.
Certain entities, such as banks, public companies and large operating companies, are exempt. Businesses should consult the Small Entity Compliance Guide on FinCEN’s website to confirm their filing obligations.
What is required?
The BOI report must include:
- The company’s name, address, state of formation and taxpayer identification number.
- Full legal names, residential addresses, dates of birth and identification numbers (e.g., driver’s license or passport) for all beneficial owners.
- For businesses formed after Jan. 1, 2024, the filing must also include information about “company applicants,” or individuals who filed the entity’s formation documents.
Filing is free; don’t pay third parties
FinCEN’s BOI filing system is free and user-friendly. Unfortunately, many companies are offering to charge businesses hundreds of dollars to complete the filing. These third-party services are unnecessary in most cases. For complex situations, such as obtaining information from uncooperative beneficial owners, consulting a CPA or attorney may be helpful.
However, business owners should avoid paying for software or services that claim to simplify the process when the official system is free. If you need guidance, the Florida Small Business Development Center (SBDC at FIU) is here to help at no cost.
Deadlines and updates
Businesses formed before Jan. 1, 2024, must file by Dec. 31. New entities created after this date will have 30 to 90 days to report, depending on their date of formation. Updates to previously filed reports, such as changes in ownership or addresses, must be submitted within 30 days of the change.
Florida Keys SBDC consultants have regular office hours at many of our county’s libraries. More information is available from Bonnie.Barnes@FloridaSBDC.org at 904-463-0513.
