Over the past year, The Orlando Law Group has been gently nudging you to ensure you file your Beneficial Ownership Information with the federal government.
The countdown clock is almost to zero for you to file this information. If you don’t, you could be subject to significant fines and possible criminal charges as this is about protecting the country from significant criminal activity.
This can be a major issue for small businesses that have fewer than 20 employees and earn less than five million in revenue.
If that describes your company, reach out to The Orlando Law Group today!
The attorneys at The Orlando Law Group can help businesses determine if they are required to file their Beneficial Ownership Information and file all the required documents for you.
We discussed much of this previously, but here is a recap of the issue.
What is the Beneficial Ownership Information?
As a recap of the issue, privately owned small businesses, for the most part, do not have to file any sort of public disclosures in the way that companies listed on a stock exchange must do every quarter.
Unfortunately, too many criminals are using fake companies for money laundering and other crimes. It is very difficult to track criminal activity without a subpoena. That is why, in 2021, the federal government passed the Corporate Transparency Act, hoping to provide more tools for law enforcement to find terrorists, money laundering, counterfeiting and more.
Yes, just like how we take off our shoes at the airport because of an act of terrorism, law-abiding small businesses will now have to file additional information with the government because of criminals.
Who is required to file Beneficial Ownership Information today?
If you are a small business with fewer than 20 employees and annual revenues of less than $5 million, you most likely will need to file.
There are 21 specific exemptions, like companies in the investment and financial realms. Most organizations who file as a 501(c) with the IRS are exempt. And large businesses are exempt.
For businesses that have multiple LLCs, such as a real estate firm that owns multiple properties or a restaurant group with each location a separate entity, this could mean filing a separate Beneficial Ownership Information for each one!
If you have to file each LLC with SunBiz or any other Secretary of State, then each LLC needs to file separate Beneficial Ownership Information.
Do I need to file a BOI if I’m a Sole Proprietor?
Really, the question is about how you are structured. Many 1099 contractors, like an Uber driver, do not have a company that has filed with the Secretary of State. Instead, they may have a business tax ID they use or provide the contracting company with a social security number. They may have a fictitious name.
Those don’t matter.
The only thing that matters to a sole proprietor is if they have filed to form a company with the Secretary of State of the state they are doing business in.
This also does not include individuals who have a professional license they acquired from the state, such as a barber or a physical therapist. If there is not a company created through the Secretary of State, then the individual does not have to file.
Of course, it’s always better to be safe than sorry, so a simple call to The Orlando Law Group can help determine if you need us to file on your behalf.
What happens if a business does not report its Beneficial Ownership Information?
Remember from our first article on this issue, the penalties for not filing are harsh. According to the federal government:
“The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”
Keep in mind, that this is not like filing with the State of Florida, where the fine is relatively small for not filing. This is an effort of the Financial Crimes Enforcement Network division of the United States Treasury.
These are the people who spend every moment looking for criminals breaking the law to protect us.
While the federal government says, “willful failure,” that term could apply to your actions if you “forget” to file or do not realize you need to file. It is still to be determined how that will be treated.
It is certainly not something any business would want to be the test case for. Plus, pay attention to that last line of the government’s warning that says senior officers of the company can be held personally accountable for a failure to file.
The attorneys at The Orlando Law Group can help your businesses prepare for this requirement as we understand business and represent clients in business law and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.