BOIR Penalties: What You Need to Know

Failing to file the Beneficial Ownership Information Report (BOIR) or providing inaccurate information can result in severe penalties. These penalties are part of the enforcement efforts under the Corporate Transparency Act (CTA), which aims to enhance transparency in business ownership.

Here’s a breakdown of the penalties associated with BOIR non-compliance:

1. Civil Penalties

Businesses that fail to file a BOIR on time or provide incomplete or incorrect information can face civil penalties. The fines include:

• Up to $500 per day for each day the report is late or incorrect.

These daily fines can add up quickly, so it’s important to file accurately and on time.

2. Criminal Penalties

Willful failure to file a BOIR, or providing false or fraudulent information, can lead to criminal penalties, which are much more severe. These include:

• Fines: Up to $10,000.

• Imprisonment: Up to two years for willfully providing false information or deliberately failing to submit the BOIR.

3. Penalties for Willful Misrepresentation

If a business or individual knowingly submits false information in a BOIR, they may also face penalties for willful misrepresentation, which could result in both civil and criminal consequences. This includes intentionally hiding beneficial owners or providing misleading details.

4. Correcting a Filing

If a business realizes they’ve submitted incorrect information, they must correct the BOIR within 30 days of discovering the mistake to avoid penalties. Failing to amend incorrect information within this time frame could trigger penalties.

How to Avoid BOIR Penalties

To avoid penalties:

• Ensure your BOIR is submitted on time (by January 1st, 2025, for entities registered before January 1st, 2024).

• Provide accurate and complete information about all beneficial owners.

• Regularly update your BOIR if there are changes in ownership or control, within 30 days of any change.

Non-compliance with BOIR requirements can result in significant financial and legal consequences, so it’s crucial for businesses to stay on top of their filing obligations.