What Is BOI and Do You Need to file a Report?

If you’ve been hearing about Beneficial Ownership Information (BOI) reporting, especially as a business owner, you might be wondering what it’s all about and whether it applies to you. Let’s break down exactly what BOI is, who needs to file, and what it means for different types of businesses and nonprofits. We’ll also explain how Profitwise Accounting (PWA) can help take this responsibility off your hands.

What Is BOI?

BOI stands for Beneficial Ownership Information, a requirement for certain businesses to report details about individuals who own, control, or benefit financially from the company. The purpose is to promote transparency and prevent illegal activities like money laundering and tax evasion.

Why Does BOI Matter?

If your business falls under the BOI filing requirements, not complying could lead to civil fines, criminal penalties, or even prison time. In short, ignoring BOI obligations can create unnecessary problems for your business—something every business owner wants to avoid.

Who needs to report?

If you own a business, you’re likely required to file BOI, even if you are the only owner. 

Companies required to report are called Reporting Companies. There are two types of reporting companies:

• Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a Secretary of State or any similar office in the United States.
• Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a Secretary of State or any similar office.

Do Single Member LLCs need to file a BOI report? 

you control the company, and directly benefit from its profits, making you subject to these requirements.

What about Sole Proprietorships?

In cases where you've registered your Sole Prop with the SOS you would have to report. Otherwise, no, sole proprietorships do not meet the criteria for a reporting company. 

Do Nonprofits Need to File BOI?

This is a common question: “Does my nonprofit need to file BOI?”

In most cases, nonprofits are exempt from BOI filing requirements. Nonprofits typically don’t have individuals who financially benefit in the same way as for-profit businesses. However, if your nonprofit has a more complex structure or engages in for-profit activities, it’s worth double-checking to ensure compliance.

Who must be reported? 

Beneficial Owners. This can be straight forward, but can also be a bit gray. 

A Beneficial Owner is defined as an individual who either directly or indirectly:

• Exercises substantial control over the reporting company, or
• Owns or controls at least 25% of the reporting company’s ownership interests

How Do You File a BOI Report?

Filing BOI doesn’t have to be complicated. Here’s a simple approach:

1. Determine if you meet the BOI Reporting requirement.
2. Gather all required information for all Beneficial Owners.
3. Visit the FinCEN website to complete the necessary forms.
4. Register for a FinCEN ID Number for easy updates in future reporting. 
5. Keep a copy of your initial report, and file updated reports as changes occur.

What Happens If You Don’t File BOI?

Just don't do this.

Be sure to report on time, report correctly, and update in a timely manner. Failing to do so can result in:

• Civil Penalties: Non-compliance can lead to hefty civil fines - $591 per day at the time this article was published - something no business owner wants to face.
• Criminal Penalties: Willfully failing to file your BOI could result in legal actions, including 2 years imprisonment, and $10,000 in fines in making it harder to operate smoothly.
• Loss of Good Standing: Your business could lose its good standing, affecting your ability to function legally.

How PWA Can Help with BOI Filing

We get it—filing & maintaining BOI can feel like another burden. That’s where Profitwise Accounting comes in. We offer BOI filing services to take the stress off your plate. Here’s how we can help:

• Initial Reporting Requirement: For a fee of $350, we handle the entire BOI process starting with a detailed analysis of your entity’s filing requirements, confirmation of Beneficial Owner eligibility, registration of a FinCEN filing number for your entity and all Beneficial Owners, and initial filing of your BOI with FinCEN. 
• Ongoing Compliance: Then, for $35 per month, we'll contact you quarterly to identify structural changes that may mandate updates, provide as-needed consultation around these triggers, and file all updated reports to make sure you remain compliant.

BOI Filing Doesn’t Have to Be a Headache

Understanding BOI requirements is essential if your business is subject to them. From single-member LLCs to nonprofits, knowing how and when to file can save you from costly fines and legal headaches. With PWA's expertise, you don’t have to navigate this alone.

If you’re ready to streamline your BOI reporting and ensure you stay compliant, contact Profitwise Accounting today. Let us handle the paperwork so you can focus on growing your business.