The Corporate Transparency Act (CTA) requires all entities, including those in Virginia, to follow strict reporting rules to help prevent financial crimes by making beneficial ownership information more transparent.
With the January 1, 2025 BOI filing deadline approaching, businesses in Virginia must understand their obligations and prepare to meet the compliance requirements.
Understanding BOI Filing Obligations
BOI filing obligation applies to nearly all types of legal entities, including LLCs, corporations and others registered with a state or tribal authority.
Let us take a closer look at the key details of BOI reporting for companies in Virginia.
What is BOI Reporting?
BOI reporting means submitting details about a company’s beneficial owners—those who own at least 25% or have significant control. The report includes personal information like:
- Full legal name
- Date of birth
- Residential address
- An ID number from a valid document like a driver’s license, passport, or FinCEN ID
Companies formed before January 1, 2024 must comply with the BOI filing regulations by January 1, 2025. Companies created after this date must file their BOI report within 90 days of registration.
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Who Needs to File?
Most entities in Virginia are considered “reporting companies” under the CTA and must file unless they qualify for one of 23 exemptions. Common exemptions are:
- Large companies with over 20 employees, more than $5 million in revenue and a physical office in the US
- Certain regulated organizations
How to File Your BOI Report
BOI filing is pretty simple, but it needs to be accurate and properly prepared. Here’s how companies in Virginia can get it done:
- Gather Required Information
Get all the necessary information about the company’s Beneficial Owners and Company Applicants, including the personal identifiers or acquisition of a FinCEN ID for every beneficial owner.
- Use the FinCEN Reporting Portal
Reports shall be filed via FinCEN’s online portal. The entities shall create an account to use the portal and ensure the report submission meets the requirements set by CTA.
- Understand FinCEN Identifiers
A FinCEN ID number lets a filer use this number instead of using personal information. A FinCEN ID, once obtained, can be used across filings. Using the above example, the same FinCEN ID can be used for all reports associated with each of the Virginia LLCs in which the beneficial owner has stakes.
Consequences of Non-Compliance
- Failure to file or timely reports of BOI may trigger severe penalties, including the following:
- $500 per day for the failure to report in penalties.
- Criminal penalties, including prison sentences for wilful violations.
Corporate Transparency Act: Key Insights
The Corporate Transparency Act (CTA) outlines key rules for disclosing beneficial ownership. Here is what companies in Virginia need to know:
- What is the Corporate Transparency Act?
The CTA requires businesses to report their beneficial ownership information to FinCEN, promoting accountability and transparency.
- Why Does the Corporate Transparency Act Matter?
The law aims to combat financial crimes like money laundering and tax evasion. Compliance is crucial to avoid penalties and uphold ethical business practices.
- What are the Corporate Transparency Act Penalties?
Penalties for violations include fines and imprisonment, highlighting the importance of accurate and updated records. Businesses should take proactive steps to comply and avoid legal trouble.
Key Dates to Remember
- January 1, 2025 – Deadline for filing the initial BOI reports by entities formed before January 1, 2024.
- Within 90 days – Filing period for entities formed on or after January 1, 2024.
It is also worth noting that FinCEN has extended the deadline for BOI filing for companies affected by the recent hurricanes.
Conclusion
Virginia companies need to act quickly to meet the BOI filing requirements. From gathering accurate information to understanding how FinCEN’s reporting system works, staying prepared is crucial. Using the FinCEN portal and getting a FinCEN ID number can make the filing process easier.
Businesses in Virginia can avoid penalties under the Corporate Transparency Act by filing their BOI reports and contribute to a more transparent and honest financial system.