Understanding the Corporate Transparency Act: Consequences of Beneficial Ownership Reporting Non-Compliance

To promote transparency and combat financial crimes, the Financial Crimes Enforcement Network (FinCEN) enforces the Corporate Transparency Act. This legislation requires companies to disclose Beneficial Ownership Information (BOI). While FinCEN provides guidance on this process, it's essential to recognize the serious consequences of non-compliance. (See also: Why do I have to file BOI?)

Consequences of Non-Compliance with BOI Reporting Requirements

Individuals who willfully violate BOI reporting requirements may face civil penalties of $591 per day for ongoing violations. In addition, they could incur criminal penalties of up to 2 years in prison and fines up to $10,000. Understanding these consequences is crucial for businesses to maintain compliance and avoid severe repercussions.

Common Violations Include:

Willfully failing to file a BOI report.
Willfully filing false BOI information.
Willfully failing to update previously reported information.

Company officers and beneficial owners must ensure accurate reporting. Deliberate failure to provide required information or submitting false data to FinCEN can have dire consequences for individuals and the company.

Want to avoid penalties? File now here.

Who Can Be Held Liable for BOI Violations?

Both individuals and corporate entities can be held liable for willful violations. This includes anyone filing false information or providing incorrect data to a filer. Notably, individuals—especially senior officers—can be liable if they contribute to non-compliance or fail to update BOI information.

Can an Individual Be Penalized for Filing False BOI on Behalf of a Company?

Yes. Individuals who willfully file false BOI reports on behalf of a company may face the same civil and criminal penalties as the company and its senior officers.

Can Beneficial Owners or Applicants Be Held Liable?

Yes. Beneficial owners or company applicants who refuse to provide required information may be held liable if their actions lead to a company’s failure to file accurate BOI.

Is the Reporting Company Responsible for Information Accuracy?

Yes. It is the responsibility of the reporting company to identify and report its beneficial owners and applicants to FinCEN. When filing, companies must certify that their reports are true, correct, and complete. Therefore, companies should carefully verify information received from beneficial owners and applicants before reporting.

Safe Harbor for Voluntary Corrections

FinCEN allows a safe harbor for unintentional errors if corrections are filed within 90 days of the original deadline. This provision highlights the importance of promptly addressing any mistakes in submitted BOI reports to avoid penalties.

Conclusion

Under the Corporate Transparency Act, companies must file Beneficial Ownership Information reports to avoid serious civil and criminal penalties. FinCEN provides guidelines and a safe harbor for correcting unintentional errors, but willful non-compliance can lead to significant fines and imprisonment. Start your hassle-free compliance journey today with ComplyBOI.com for easy and accurate filings.