What Are the BOIR Penalties?
Failing to submit the Beneficial Ownership Information Report (BOIR) on time or providing inaccurate details can lead to serious consequences. These penalties are enforced under the Corporate Transparency Act (CTA), which was enacted in 2021 as part of the Anti-Money Laundering Act of 2020. The purpose of these regulations is to improve transparency in business ownership and prevent illicit financial activities.
Below is an overview of the penalties for non-compliance with BOIR requirements:
1. Civil Penalties
Companies that fail to file a BOIR by the deadline or submit incomplete or incorrect details may be subject to civil fines, including:
- A penalty of up to $500 per day for each day the report is overdue or contains errors.
These fines can accumulate rapidly, making timely and accurate filing essential.
2. Criminal Penalties
Intentional non-compliance or submission of false information can result in severe criminal penalties, such as:
- Monetary Fines: Up to $10,000.
- Prison Time: Up to two years for deliberately failing to file or knowingly submitting fraudulent information.
3. Penalties for Knowingly Providing False Information
If a business or individual intentionally submits false or misleading information in their BOIR, they may face both civil and criminal penalties. This includes:
- Deliberately concealing beneficial ownership details.
- Providing false documentation or misleading data to evade compliance.
4. Correcting an Inaccurate Filing
If a company discovers an error in a previously submitted BOIR, they have 30 days from the date of discovery to correct it. Timely corrections can help avoid penalties for inaccurate reporting.
How to Avoid BOIR Penalties
To remain compliant and avoid financial or legal repercussions:
- Submit your BOIR on time—for companies registered before January 1, 2024, the deadline is January 1, 2025.
- Ensure accuracy by providing complete and correct information about all beneficial owners.
- Update your BOIR whenever there are changes in ownership or control—updates must be filed within 30 days of any modifications.
Failure to comply with BOIR requirements can lead to substantial fines and legal consequences. To stay in good standing, businesses should prioritize timely and accurate filings.