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What exactly is BOI (Beneficial Ownership Information), and do you really need to file it?
If you've heard this term being thrown around lately, especially if you own multiple businesses or a single-member LLC, it's natural to have questions. Let's get into what BOI is, who needs to file it, and what this means for nonprofits and different types of business entities.
Plus, we’ll explain how Patrick Accounting can take this off your plate for good.
What Is BOI
So, what exactly is BOI? BOI stands for Beneficial Ownership Information. It’s a regulatory requirement that some businesses must follow, where they report details about the individuals who own, control, or financially benefit from the company. This isn't just paperwork; it's about promoting transparency and preventing illegal activities like money laundering and tax evasion.
But Why Should You Care About BOI?
If your business falls under the BOI requirements and you don’t file, you could face fines, penalties, or even legal issues. In short, not filing BOI can bring unnecessary headaches that no business owner wants to deal with.
Do Nonprofits Need to Worry About BOI?
This is a big question we hear often: "Does my nonprofit need to file BOI?"
The short answer is generally no, nonprofits do not need to file BOI.
The reason is simple—nonprofits usually have a different structure. They don't have individuals who financially benefit in the same way as owners of for-profit businesses. However, if your nonprofit has a complex structure or engages in for-profit activities, it’s best to double-check. Better safe than sorry, right?
Do Single-Member LLCs and Other Entities Have to File BOI?
Here's another question that comes up a lot: "I own a single-member LLC. Do I need to file BOI?"
In most cases, yes, you do. Even if you’re the only owner, the BOI requirements usually still apply to you.
Why? Because as the sole member, you control the company and benefit directly from its profits.
What Types of Businesses Have to File BOI?
Multi-Member LLCs
Yes, BOI filing is required here too. You'll need to report information about each member who exercises control or benefits financially.
Corporations
If someone owns 25% or more of the shares or has significant control over the corporation, their information will need to be reported.
Sole Proprietorships
Good news here—sole proprietorships are generally exempt since they’re not considered separate legal entities from their owners.
How Do You File BOI?
Filing BOI sounds like a hassle, but it doesn’t have to be complicated. Here’s how you can tackle it:
- Gather the Necessary Info: This includes details like names, addresses, and Social Security numbers (or similar) of individuals who own or control the business.
- Fill Out the Required Forms: These forms can vary depending on your state and business type. They usually involve providing detailed information about your business and its beneficial owners.
- Submit the Forms: Depending on your state, this could mean filing with your state's Secretary of State or another similar agency.
- Keep Records: You’ll likely need to update this information annually or whenever changes occur.
What Happens If You Don’t File BOI?
Let’s be real: Ignoring BOI requirements isn't a good idea. Here's what can happen if you don't file:
- Fines and Penalties: Non-compliance can result in hefty fines, which no small business owner wants to deal with.
- Legal Trouble: Failing to file could lead to legal action, making it even harder to run your business smoothly.
- Loss of Good Standing: Your business could lose its good standing status, which can affect your ability to operate legally and efficiently.
How Patrick Accounting Can Help You with BOI Filing
By now, you might be thinking, "This sounds like a lot of work." And you're right.
But here’s the good news: You don’t have to handle this alone. Patrick Accounting offers a BOI filing service that takes the stress off your shoulders. Here’s how it works:
- Initial Filing: For a fee of $350, we’ll handle the entire initial filing process for you. That includes gathering all the necessary information and ensuring it’s filed correctly.
- Maintenance: Once you're set up, we'll help keep your BOI information up to date. For just $35, we'll handle the maintenance to ensure you're always in compliance. If you own more than five entities, we offer a bundled maintenance package at $175.
- Changes and Updates: Businesses change, and we’re here to help when they do. If you have fewer than five entities, we’ll make any updates you need for free. Own more than five entities? We charge a small fee of $100 for changes.
FAQs About BOI Filing
What if my business has no beneficial owners?
You may still need to file BOI. In such cases, you'll likely need to provide information about the individuals who have control over the business.
How often do I need to file BOI?
You typically need to update this information annually or whenever there are changes in beneficial ownership.
Do sole proprietorships need to file BOI?
Sole proprietorships are generally exempt from BOI requirements.
BOI Filing Doesn’t Have to Be a Headache
Understanding BOI is crucial, especially if you own a business that falls under these requirements. From single-member LLCs to nonprofits, knowing when and how to file BOI can save you from costly fines and legal issues down the road.
And remember, you don’t have to go it alone. Patrick Accounting is here to simplify your BOI filing process, offering you peace of mind so you can focus on growing your business. If you have more questions or are ready to get started with your BOI filing, contact us today.
We're here to help make compliance one less thing for you to worry about.
