Are There BOI Reporting Penalties? Common Mistakes & How to Avoid Them

The Financial Crimes Enforcement Network's (FinCEN) Beneficial Ownership Information Reporting (BOIR) is a core requirement under the Corporate Transparency Act (CTA), with the original deadline on January 1, 2024. To improve transparency and prevent illegal activities, the CTA requires reporting companies, including any limited liability company, corporation, partnership and other companies formed or registered in any state within the U.S., to report beneficial ownership information.

The CTA has gone through various court rulings which affected the deadlines and enforceability of the CTA.  Recently, FinCEN officially posted on its website that businesses are now required to complete FinCEN BOIR by the new deadline of March 21, 2025.  FinCEN stated that it may further extend this deadline, but there is no specific guidelines at this time as to when the new deadline will be.  

However, on March 2, 2025, the Department of Treasury announced that they will not impose penalties on U.S. citizens who do not meet this deadline and that the Treasury is in the process of revising the CTA.  Although the Treasury expressed that they intend to apply the CTA on foreign persons, there are no formal revised rules or modifications to the CTA at this time.

Without the formal revisions to the CTA, businesses should continue to prepare to file and meet the deadline of March 21, 2025, to avoid any last-minute announcements and penalties. 

It is unclear at this time as to if there will be a new deadline and what companies will be further exempted from the CTA. Getting prepared to file is the key to combatting this uncertainty because any failure to adhere to any FinCEN BOIR deadlines could result in serious consequences for companies and controlling individuals.  The CTA, as it is written today, enforces personal accountability by managers, officers, and owners, making compliance essential for those in leadership positions and owners and those who exercise substantial control over a company.

CTA provides for serious FinCEN BOI reporting penalties. Non-compliance can result in both civil and criminal penalties, including:

• Civil Penalties:
  • $591 per day per entity for non-compliance.
• Criminal Penalties:
  • Up to $10,000 in fines.
  • Up to two years in jail.

These sanctions cover owners, managers, and officers including the CEO, CFO, President, Vice President, General Counsel, and Secretary. These individuals can be personally liable, even to the point of imprisonment, if the company fails to comply with the CTA.

FinCEN BOI penalties fall into two main categories:

1. Financial Penalties – Daily fines that accumulate for failure to report or update information.
2. Legal Consequences – Criminal charges that could result in hefty fines and imprisonment.

The Financial Crimes Enforcement Network enforces the current fines and potential imprisonment for noncompliance.

Many businesses make errors that lead to non-compliance. The most common mistakes include:

Providing inaccurate or incomplete details about beneficial owners or business structures can lead to penalties. Errors often stem from:

• Misidentifying reporting company's beneficial owners.
• Inconsistent data across legal documents.
• Missing critical information, such as addresses or reporting company's ownership interests.

Failing to meet the required filing deadlines (once the injunction is lifted) can result in daily fines. Many businesses miss deadlines due to:

• Lack of awareness about the CTA requirements.
• Poor record-keeping and document organization.
• Delays in gathering ownership information.

Businesses must report any changes in ownership, structure, or key individuals within 30 days of the changes. Common reasons for failing to update information include:

• Overlooking changes in management or ownership.
• Assuming minor updates are not required.
• Lack of a clear process for monitoring and reporting changes.

Many businesses, especially those with complex structures, struggle to determine their beneficial owners correctly. Guessing or making assumptions can lead to misreporting, increasing the risk of penalties. Businesses with multiple entities should consult legal professionals to ensure accurate reporting process.

Disorganized records make it difficult to file BOI reports and verify ownership details. Having well-maintained documentation is essential for:

• FinCEN BOI reporting compliance.
• Opening bank accounts with financial institutions.
• Securing loans and investments.
• Future state or federal beneficial ownership filings.

To ensure compliance and avoid penalties, businesses should take the following steps:

• Collect entity ownership records, legal documents, and officer details.
• Maintain organized records to simplify the filing process and future updates.

• Carefully determine beneficial owners and ownership percentages.
• Cross-check legal documents to ensure accuracy and consistency.
• Understand the complex parameters of the CTA to correctly identify beneficial owners.

• Report to FinCEN as required and update any changes promptly.
• Avoid delays by setting internal reminders for filing deadlines.
• Ensure filings are reviewed for accuracy before submission.

• Do not guess who are the beneficial owners —accuracy is critical.
• Stay organized, especially if managing multiple entities.
• Consult a legal professional if unsure about reporting requirements.
• Double-check that legal documents match the information reported.

Leveraging a compliance technology platform can help businesses stay ahead of FinCEN BOI reporting requirements.  However, most tech platforms currently available on the market only file the information once the lawyers have analyzed what to report.  These platforms do not determine who are the beneficial owners.  Determining accurately who are the beneficial owners is the most important part of the process. The ideal platform should do the following:

• Automate beneficial ownership analysis to ensure accuracy.
• Streamline reporting companies created or registered filings, including foreign reporting companies directly with FinCEN.
• Reduce manual errors by integrating with existing legal documentation.
• Provide cost-effective compliance solutions that save time and effort.
• Backed by lawyers who continue to analyze any reporting requirements from the federal government and/or the states and build those regulations in the platform for further reporting requirements.

By utilizing compliance automation tools, businesses can minimize the risk of errors and ensure regulatory adherence with minimal effort.

Businesses can streamline FinCEN BOI compliance with SeedJura.CO, a tech platform backed by lawyers. The platform:

• Automatically determines who are the beneficial owners based on legal requirements of the CTA.
• Files directly with FinCEN with a click of a button.
• Provides an affordable solution, with preparation for just a one-time $10 sign-up fee (regardless of how many entities you may have).  Filing at $89.99 per entity (first entity is free), only payable upon clicking on the File button.
• Businesses can get their entities ready to be filed with minimal costs.  Only file when they must.  Only pay when they file.  If they are no longer to file, they will be able to enjoy other features on SeedJura.CO - get their entities organized, access automatically generated org charts, and obtain automatically generated corporate legal documents.

The FinCEN BOI reporting requirement under the CTA has a deadline of March 21, 2025. This deadline may get extended.  The CTA may be revised by the Treasury.  However, the revised rules have not been published and any extension has not been issued.  it is important that businesses should get prepared to file at this time.  This is because if a business misses the FinCEN BOI reporting deadline in the future, it can face substantial penalties. Here’s what you need to do:

If businesses are prepared today, then as soon as it is confirmed that they must file, they can file with FinCEN as soon as possible.

Double-check all the information before submitting the report. Providing incomplete, incorrect, or inconsistent details will only increase the risk of additional fines. Ensure that your beneficial ownership data, ownership percentages, and other details match legal documentation accurately.

If you are not sure of the process, or how the CTA may apply to you, or what penalties can be applied to your case, it's best to seek legal advice from a lawyer who has studied the CTA. They will be able to advise you on what to do next and your strategies in combatting the uncertainty in the CTA.

Implementing a compliance technology platform can help avoid missed deadlines in the future. A good technology platform backed by lawyers can reduce your stress in understanding deadlines and any change in requirements.  It can also reduce the risk of error and non-compliance.

By staying proactive, ensuring that reports are accurate, and filing promptly if the revised rules confirm that the CTA applies to you, businesses can mitigate the penalties associated with late or missed FinCEN BOI reports.

With these uncertainties, businesses should get all of their entities and information prepared now and ready to be filed in case the revised CTA will apply to their situations.

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The uncertainty surrounding the FinCEN BOI reporting has created confusion and anxiety for businesses. Businesses should be prepared to act fast in case the revised CTA confirms that they need to file. The consequences of refusing to comply — through stiff fines, criminal penalties, or individual accountability — are too severe to ignore.

This is an excellent opportunity for organizations to get your entities organized. You can get organized and prepared to file and avoid costly mistakes by staying informed, organizing legal documents, and enjoying many features on SeedJura.CO. SeedJura.CO offers a simple, cost-effective platform to ensure your FinCEN BOI filings are accurate, timely, and fully compliant.

Avoid any penalties—Stay informed and be proactive on your compliance with FinCEN BOI reporting. Contact SeedJura.CO to get started and secure your peace of mind with effortless compliance.