BOI reporting was initiated by the Corporate Transparency Act to combat money laundering, fraud and other illegal acts effectively. This requirement applies to companies and entities all over the country, including in the state of Ohio.
What Is BOI Reporting?
The concept of Beneficial Ownership Information (BOI) reporting is exactly like what it sounds – providing information about a business’s actual owners. What does this ‘actual owner’ or its related term ‘beneficial owner’ mean? It means the person who either controls or owns an organization.
According to the Corporate Transparency Act, all businesses, including Ohio LLCs, will have to file a report with FinCEN regarding the company’s beneficial owners, known as a BOI report. The BOI report must include personal details, including the full name of the Beneficial Owner, Date of Birth, Address, and one unique identifying number from an acceptable ID source.
Who Needs to File a BOI Report in Ohio?
Examples of entities in Ohio that are obliged to file this BOI report to FinCEN include all entities, except for a few exceptions, that are created in or registered with the State of Ohio, whether domestic or foreign corporations, LLCs, or any other similar entities. This includes all new and currently operating companies, to the extent such are obliged to file reports regarding their ownership.
Depending on the structure, it may be required and, thus, very important to Ohio LLCs for federal compliance as well.
BOI Report for Ohio LLCs
According to the disclosures of its beneficial ownership information, an LLC in Ohio has an obligation to file a BOI report with FinCEN. The names, addresses, dates of birth, and other identifying information of the LLC’s beneficial owners need to be stated in the report. In some instances, it may need information about company applicants, meaning those individuals who file the documents for the formation of the LLC.
Therefore, LLC has to present its BOI report within the provided timeline so that penalties or fines regarding non-compliance can be avoided. Failure to provide correct reporting is huge in losses regarding money penalties and penalties under the Corporate Transparency Act.
Corporate Transparency Act and Its Implications for Ohio Businesses
The Corporate Transparency Act is one of the most significant regulatory steps in the direction of transparency with respect to the ownership structure of business entities within the United States.
According to this law, the vast majority of U.S. companies, including those conducting activities in Ohio, are required to submit the BOI report to FinCEN and disclose information about the ownership structure, more so of their substantial beneficiaries. This is part of the general effort to crack down on financial crimes such as money laundering, tax evasion, and corruption.
Under the Corporate Transparency Act, businesses are mandated to report to FinCEN in great detail regarding their beneficial ownership. This rule is intended to try to cut down on financial crimes by making it more difficult for illicit actors to conceal themselves behind anonymous entities.
Ohio business entities should be informed of the implications of this law and stand prepared to report the prescribed information. The Corporate Transparency Act indeed requires businesses to be pretty judicious with their reporting of ownership structure or fines, sanctions or legal issues related to the same might arise.
Corporate Transparency Act Penalties
Non-compliance with the Corporate Transparency Act can result in severe sanctions against Ohio companies. In the event of a failure of an LLC and any other business organization to file a BOI report, a filed report containing incomplete or inaccurate information may be assessed with significant civil penalties. Willful violations may also give rise to criminal penalties, including fines and imprisonment.
These fines can be as high as $500 per day for each day the violation continues. Besides this, businesses may also receive extra penalties due to filing false or misleading information.
Conclusion
It is very important that, for Ohio businesses, good standing in terms of BOI filing compliance regarding the Corporate Transparency Act is pursued. Whether you are forming an Ohio LLC or running an existing one, it is very important that you understand the requirements in terms of BOI reporting so as to avoid some penalties and keep your business in good standing.
Filing your BOI report correctly and maintaining current ownership information are steps that Ohio businesses can take to be in conformance with federal regulations, but also to support the greater initiative of improving financial transparency.
If you require any assistance with understanding the BOI requirements and for filing your reports, please contact us and let us help.