Real Estate Businesses Will Be Underwater if They Miss the BOI Report Filing Deadline

In the ever-changing real estate industry, businesses – including commercial real estate companies, Airbnb properties, real estate brokers, land developers and everyone in between – grapple with a host of responsibilities. Whether it’s the intricacies of property appraisal, the nuances of securing clients, or the complexities of adhering to both local and federal regulations, the challenges are many. Amid these diverse duties lies a pivotal federal requirement that often slips under the radar: the submission of the Beneficial Ownership Information (BOI) report. The requirements around the filing of this document is proof that the federal government is committed to ensuring commercial transparency by identifying individuals and owners behind various businesses.

Beneficial Ownership: What Does it Mean for Real Estate Businesses? 

At its core, beneficial ownership refers to those individuals or entities that wield control or sway over an asset or company, irrespective of the registered legal name. To combat money laundering and curb terrorist financing, the U.S. Congress rolled out the Corporate Transparency Act (CTA) on January 1, 2021. This act, a segment of the broader Anti-Money Laundering Act of 2020, obliges entities to relay their beneficial ownership specifics to the Financial Crimes Enforcement Network (FinCEN) by the dawn of January 1, 2024.

While on the surface, the BOI report may seem like a mere administrative chore, its affects on the real estate sector are profound and far-reaching. Crafted as a robust instrument, the BOI report is an example of transparency, fostering legitimate business operations in real estate.

The Dangers of Not Filing a BOI Report

The fallout from non-compliance is both extensive and severe. Businesses caught off-guard or those that are ill-prepared risk facing hefty monetary penalties that could jeopardize their financial foundation. More alarmingly, the legal ramifications loom large: individuals held accountable for any lapses or intentional non-compliance could confront not just substantial fines but also incarceration. This scenario underscores the gravity of these federal directives and the pressing need for thorough awareness and readiness.

Entities that do not file may incur fines of up to $500 per day, capping at $10,000. Deliberate non-compliance or misinformation could lead to criminal charges, with potential prison sentences of up to two years.

Don’t Count on the U.S. Government to Communicate Thoroughly

Historically, the US Federal Government’s outreach strategy concerning new mandates and regulations has been marked by its limited dissemination. This approach has often left businesses, individuals, and entire sectors scrambling, leading to widespread confusion and, at times, non-compliance. Past mandates, such as the Real ID Act and Medicare Enrollment, stand as stark reminders of this trend.

However, in a bid to bridge this gap, the U.S. Federal Government has disseminated requirements concerning the filing of a Beneficial Ownership Information report through platforms such as:

• Financial Crimes Enforcement Network (FinCen): https://www.fincen.gov/boi
• U.S. Department of the Treasury: https://home.treasury.gov/news/press-releases/jy0979
• Federal Register: https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements
• GovInfo: https://www.govinfo.gov/app/details/FR-2022-09-30/2022-21020

These platforms serve as reservoirs of comprehensive information, guidelines, and resources, guiding businesses through the maze of compliance.

A Look At the Corporate Transparency Act (CTA)

The unveiling of the CTA heralded a new era in financial transparency and corporate governance. This trailblazing legislation, with its laser focus on transparency, targets opaque entities like shell companies. Under the CTA’s rigorous framework, businesses, termed as reporting companies, are mandated to furnish a detailed account of their beneficial owners to FinCEN.

A BOI report should include:

• Legal name
• Trade names, “doing business as” (d/b/a), or “trading as” (t/a) names
• Current U.S. street address:
  • Principal place of business for domestic companies
  • U.S. business address for foreign companies
• Jurisdiction of formation or registration
• Taxpayer Identification Number

Indicate the type of BOI filing:

• Initial report
• Correction of a prior report
• Update to a prior report

Necessary information for individual beneficial owners and company applicants:

• Full legal name
• Date of birth
• Current address
• Unique identifying number and its issuing jurisdiction (e.g., U.S. passport or driver license)
• Image of the document showing the identifying number

Optional Approach:

• Obtain a FinCEN identifier to use in future filings as an alternative to the above details

FileForms: Laying the Foundation for BOI Report Compliance

In the face of potential repercussions, a passive approach to filing a BOI report spells disaster. The gold standard is to be proactive, informed, and ready.

FileForms emerges as a beacon of hope, offering a holistic solution for all business form and report submissions. Harnessing cutting-edge technology and expert services, we ensure every client’s filing and reporting needs are met with precision. We offer invaluable advice and expertise for beneficial owners mandated to submit a BOI report to FinCEN, guaranteeing compliance with all necessary standards.

Our expertise encompasses:

• Beneficial Ownership Information Reports
• Foreign Bank Account Reports
• Annual Reports and Registered Agent Services
• Foreign Account Tax Compliance Act Reporting

Our approach not only underscores the urgency and significance of accurate filing and reporting but also emphasizes FileForms’ dedication to offering specialized solutions in these domains.

As the deadline for the Beneficial Ownership Information report draws near, its urgency and significance are clear. This document is not a mere suggestion; it’s a mandate by the U.S. Federal Government. Get started with FileForms today and stay proactive, transparent, and compliant.