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Shit You Need to Know, and How You're Going to Do It: New LLC Requirements for 2024

Thursday, December 21, 2023 Edition

OK business owners listen up! If you have an LLC (this is specific to businesses in the U.S.), there is a NEW filing requirement with the government for 2024. It's called the Corporate Act and the Beneficial Ownership Report. And if we don't pay attention and do this we could be fined $500 A DAY or up to two years in prison. Yikes.

Here's what the Corporate Act and the Beneficial Ownership Report is all about:

  • I'm seeing the phrase Beneficial Ownership Report referred to has BOI, so just note that lingo for yourself

  • in January 2021 the government signed a Corporate Transparency Act (CTA) to combat things like money laundering, shell companies, and other illegal financial activities.

  • We're going to need to file a BOI which includes some details about the people who are owners within our businesses and benefit from the business. So for me, I own 99% and my husband owns 1%.

  • Someone who benefits is someone who directly or indirectly enjoys over 25% of the economic benefit of the business - so in my case, that is ONLY me.

Here are the exact types of businesses that need to do this:

  • The CTA says "reporting companies" which means corporations and LLCs (including if you file as an S-Corp, which I do!)

Here's who DOES NOT need to file:

  • Sole proprietorships (this is you if you're an independent contractor)

  • Businesses with 20 or more employees and $5 million in recipes

  • Publicity traded companies, non-profits, insurance companies

Here's when we have to file our BOI, and it depends on when you created your LLC:

  • If you formed your LLC BEFORE January 1, 2024, you have until December 31, 2024

  • If you form your LLC AFTER January 1, 2024, you have 90 days to file

What we need to include in our BOI and how to file:

  • We're going to include information about the people who qualify as beneficial owners - and again that means anyone enjoys at least 25% or more economically of the business

  • Here's the exact key info we need to report on:

  1. Full Legal Name

  2. Date of Birth

  3. Current Residential or Business Address

  4. Identification Number (like your driver's license or passport)

  5. The Nature and Extent of Ownership, which is the percentage you own

  • FYI there will be no fee to file

  • There will be a new database launching on January 1, 2024, called "BOSS" which is the Beneficial Ownership Secure System

OK, so basically make a mental note. We don't need to do anything today, but we will next year and I'll let you know when the new BOSS system is live! I am a rule follower, so I wanted to make sure we're ALL aware of this new, important thing we'll need to do!

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