Stay Ahead of the Curve: Why Filing Your BOI Report Now Protects Your Business

You may have heard of a new government filing called the BOI Report, or Beneficial Ownership Information report. If you run a nonprofit corporation, good news—you don’t need to file a BOI Report. But your board members or friends who run small businesses will need to get familiar with it ASAP.

The BOI Report helps the government and the public know who owns what parts of American businesses. The government wants to make sure that owners are open about who really owns the company. They're specifically keeping an eye on American companies being run from other countries.

The filing doesn't cost anything, but there are supposed to be fines to the tune of $500 per day minimum for entities that don't file. That's supposed to scare you into filing ASAP. But here's the thing. These are squishy rules right now because the courts are fighting over it, so you may want to consider the whole story before getting on top of that filing.

The BOI rules started because of a law passed in 2023 called the Corporate Transparency Act. It went into effect in January 2024, but ever since then, different supreme court districts have cycled through taking it away nationwide, then making it required, and then not. Right now it's technically not, but that could change any day.

We'll talk about who would need to file this report, and when, but first let me tell you about why savvy leaders are concerned for their organizations.

I found out about this last weekend from a client who needed to roll back the start of our in-person meeting because what the form said would be a 5 minute free filing turned into nearly an hour of work. My client owns and runs a long-running executive coaching company, and she has employees. Even when I told her about the court fight, and that the filing isn't necessary right now, she pushed back hard.

She said that it’s super important for business owners like her to follow these rules closely, even if the rules are not in effect at the moment, because minority-owned businesses can experience undue investigation and fines when a rule change hasn't been publicized enough for people to know that they need to follow it. She said this based on over 20 years of being a business owner in America. She's seen minority-owned businesses shut down on a technicality that other businesses skipped without penalty.

Now, who would need to fill out the BOI report if the courts stop fighting about this new rule and the fines suddenly become enforceable? If you’ve just started an LLC or a for-profit corporation, you'd have 30 days to file after your business is official at the Secretary of State. LLCs or for-profit corporations existing prior to January 2024 are supposed to just file ASAP. There aren't a lot of details about retroactive fines, but some legal experts are hinting at retroactive fines being possible, and $500 per day gets steep fast.

Do you see why it's so important for small business owners to file their BOI report now?

There are a lot of scams out there right now preying on business owners' fears and getting them to pay these scam companies for their business filing (and many scammers are selling business information instead of filing the BOI report as promised.)

Don't risk getting scammed. Set aside an hour and file the report yourself at boiefiling.fincen.gov. It doesn’t cost you anything except a bit of paperwork annoyance.

Right now, the rules are set to be debated in court after March 2025. But if you're concerned about how sketchy the courts have been with this so far, go ahead and file it.

Remember, knowing what to do with these rules helps your business stay safe and do well. Let's keep our businesses strong and safe together!