Although it has not, to date, been highly publicized, make no mistake, the Beneficial Ownership Information (BOI) report, a direct result of the Corporate Transparency Act (CTA), will become a requirement for 97% of small businesses in the United States starting in 2024.
The BOI report is a new requirement resulting from the CTA, wherein businesses will be required to disclose information about their beneficial owners. The Financial Crimes Enforcement Network (FinCEN), a part of the U.S. Department of Treasury, will be collecting this information to combat illicit actors in the country laundering money using corporations and other entities.
There are an estimated 32-40 million businesses in the United States that will be affected by this new reporting requirement, a result of the Corporate Transparency Act. If a U.S.-based business earns less than $5 million in annual sales revenue and has less than 20 full-time employees, that entity is required to file a BOI report.
Chances are, farming and other agricultural operations will fall into this category. If you own or operate an agricultural business in the country, you’ll likely be affected. Even small family farms, those meant primarily for subsistence production and some small-scale revenue, will be affected by this new requirement.
Also, many farm operations in the country are multi-faceted, which may involve multiple entities. For instance, Smith Family Farms performs day-to-day operations under Smith Family Farms, LLC.
However, the farm’s hay sale operation is under a separate LLC, Smith Hay Sales, LLC. The family also keeps bees on their property, selling the honey for a profit as well. Because of this, the family also incepted a third entity: Smith Family Beekeeping, LLC.
All three entities, although owned by the same individuals, will be required to file a BOI report. These reports take time and effort to file, as well. For a simple business structure, one could be looking at two hours to gather the information and file the report. This increases exponentially as business structures become more and more complex.
One of the problems somewhat unique to agricultural production is, many times, those individuals who would be responsible for filing their BOI report are the ones operating the business. They are out in the fields, operating the machinery, repairing what is broken, and ensuring production doesn’t come to a standstill.
Because of these individuals’ high level of involvement, their time behind a computer screen is limited. They could be missing out on important information (like what even is the BOI report) and could easily miss hard deadlines.
There’s one more thing for farmers and other agricultural businesses to keep in mind when filing a BOI report. Entities are not only required to disclose beneficial ownership information, but also information of those individuals who exercise substantial control of the company, whether they hold 25% equity or not.
As with any regulatory reporting requirement, there are consequences if an entity does not comply. If the deadline is missed, or if information is left out or erroneously entered, the filing entity could potentially be fined $500 per day, up to $10,000. In some instances, FinCEN articulates jail time as a penalty for those who purposefully withhold information, as well.
Most agricultural operations, both large and small, cannot afford to pay these penalties or spend time in prison. This is why, as an agricultural producer, it is imperative to stay up to date with reporting requirements and other regulations by the government.
Farmers and other individuals involved in agricultural operations don’t typically have the time or the resources to spend behind a computer screen learning the nuances of a new federal reporting requirement, manually filing the form, and hoping that the information is correct so as not to incur fees.
FileForms is the solution to this problem! Because of our cutting-edge online filing platform, partnered with our industry-leading expert team, we can cut the time it would take to file this new BOI report from two to three hours down to just 10 or 15 minutes. Plus, as business evolves and beneficial ownership changes, as it typically does in agriculture, the information entered remains securely stored for the next time a report must be filed.
Don’t waste any more time or effort on learning about FinCEN, the Corporate Transparency Act, or this new BOI report. Instead, get started with FileForms today, so you can get back to doing what you do best: running your business!
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