With the Corporate Transparency Act, or CTA, taking effect in the U.S., businesses are adjusting to new compliance measures. Florida-based companies are no exception. In Florida, businesses will have to meet BOI reporting requirements as a way of making sure transparency is maintained and such financial crimes as money laundering and tax evasion are inhibited. This article, therefore, explains the BOI reporting requirements for Florida companies and why its compliance is important.
What is BOI Reporting?
BOI reporting is the process that a business has to undertake in reporting information about its beneficial ownership, as mandated by the CTA. A beneficial owner can be defined as a person who holds, directly or indirectly, at least 25% of the company, controls a certain portion of its vote, or has strong influence over the way the company conducts its activities. This form of reporting ensures that the government retains a record of such individuals to help deter fraudulent activities and get complete disclosure.
This is done through the Financial Crimes Enforcement Network, FinCEN. The businesses have to report the name, address, date of birth, and identifying numbers of the beneficial owner, such as a driver’s license or passport number. All this information is updated whenever a change in ownership structure occurs.
BOI Reporting Requirements for Companies in Florida
BOI reporting requirements for Florida-based companies are no different from other states in the U.S. In this respect, every corporation, LLC, or any other similar entity is required to file its beneficial ownership information with FinCEN. With this being said, the BOI filing requirements include:
- Initial Filing – Newly formed businesses in Florida must file BOI information within 90 days of its formation or registration. Initial filing ensures the government has records of the beneficial owners from the commencement of the company’s operation.
- Ongoing Updates – Any change in the structure of the beneficial ownership must be filed within 30 days of the change, such as adding any new owner or change in control. This shall be crucial for one to act timely and keep the filing up to date.
- Annual Reporting – While not a yearly requirement, business information must always be correct and up to date. If no changes have occurred over the previous year, there is no need for a business to file a new report, but it must update its records to reflect accuracy.
Why BOI Reporting Compliance Matters
There are some pretty serious penalties for noncompliance with the BOI reporting requirements: every organisation that fails to timely file its BOI report, or that submits a report containing inaccurate or incomplete information, is subject to a fine of up to $500 per day. In extreme cases, criminal penalties may also be levied, including fines of as much as $10,000 and imprisonment of as long as two years.
Additionally, reputational damage may occur in cases of non-compliance. Beyond that, companies that fail to meet their obligations concerning transparency may forfeit investor, customer, and business partner confidence. In Florida’s very competitive business environment, maintaining a clean record is among the chief concerns of companies looking toward long-term success.
BOI Filing Exemptions for Florida Companies
While the majority of Florida firms fall under the BOI filing requirement, there are a few that do not. A few entities are not under obligation to file their beneficial ownership. Such include:
- Publicly traded companies
- Certain regulated entities, such as banks and credit unions
- Non-profit organisations
- Large operating companies that meet specific criteria, including having more than 20 full-time employees and $5 million in annual revenue
With this, businesses need to make sure that they can identify their qualification for exemptions towards avoiding unnecessary filings.
Conclusion
Compliancy with BOI filing is very important to Florida companies because of the variation in penalties and because it is going to affect transparency. Business entities must ensure that accurate reporting of such information for the reporting company’s beneficial ownership reaches out on required timelines to meet the requirements of the Corporate Transparency Act, whether you are a newly formed company or already an established entity.