EP 1.08 | Beneficial Ownership Information Filing for Your LLC: What You Need To Know

The Corporate Transparency Act is probably something the average business owner has heard of, but it's certainly something you should be aware of if you have an LLC.

This act now requires certain companies to report Beneficial Ownership Information on a yearly basis. But what does this mean, and who does this affect?

In this episode, I talk with CPA and tax advisory expert, Leslie M. Jones, of L.M. Jones & Associates, and she breaks down exactly what this means for you as a business owner. Listen in as Leslie and I discuss the origin of this new requirement, why it matters, and how you can make sure you're in compliance. This is an episode you do not want to miss!

In this episode:

0:03 Understanding the Beneficial Ownership Information Requirement

3:01 Why is This New Requirement Relevant?

4:45 Who This New Requirement is For

5:27 How to File Your BOI

8:14 What Happens If You Do Not File On Time

12:54 Annual Report and EIN Requirements

18:20 BOI Filing Assistance and Resources

Links mentioned in this episode:

File your BOI
Visit Leslie's website

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Transcript

Understanding the Beneficial Ownership Information Requirement

Victoria 0:03

Welcome to the Web Design and Marketing Diaries podcast , where we discuss online strategies designed to help you grow your business and stand out in your industry . All right , thank you , guys so much for joining this special episode of the Web Design and Marketing Diaries podcast . Thank you , guys , so much for joining this special episode of the Web Design and Marketing Diaries podcast . I'm really excited about this episode here because I have a special guest that's going to be joining me talking about something that I'm sure many business owners have heard about over probably all of this year I think I probably started hearing about it mostly at the beginning of this year and that is the new requirement for LLCs , known as the beneficial information or beneficial ownership information filing requirement . So I kept seeing these posts on Facebook about it and people saying you know , this is something that you have to do , and it seemed kind of scary because it appears that some of the fines and things can be pretty hefty if you don't follow the filing requirements . And I was actually getting ready to try and do mine myself and I got nervous , I got scared , and so I say , let me lean on my network and reach out to someone who , I know for a fact , will understand this and be able to explain it to me and also be able to explain it to you guys and be able to explain it to me and also be able to explain it to you guys , and just let us know what to expect , what it is that we should be doing and how we can fulfill this requirement .

Victoria 1:31

All right , so I'm so happy to have on the podcast today Leslie M Jones . She is the owner and CPA of LM Jones and Associates , a CPA firm here in Michigan , in Southeastern Michigan , and she's highly skilled and dedicated with her clients . She's very knowledgeable about tax advisory , tax accounting , financial planning advisory services for business owners , and I know that she's going to be the perfect person to be able to give us some good information on this . So , without further ado , I'm going to bring Leslie on . All right , there she is . Hey , leslie . Hey , how are you ? I'm pretty good . I'm so glad you were able to join today . Thank you so much for taking the time out of your day to jump on and just talk about this new requirement that we got going on here . I think I said it right the beneficial ownership information . Is that what it's called ?

Leslie 2:31

Yes , the beneficial ownership information , and it's a new requirement , particularly under the Corporate Transparency Act , and it's regulated by the Financial Crimes Enforcement Network .

Victoria 2:45

Okay , so can you talk to us a little bit more about , first of all , who is that ? Who is the Financial Crimes Enforcement Network , and why do we , as LLC owners or members , should care about that ?

Leslie 2:59

Right . So why is this relevant ? It's

Why is This New Requirement Relevant?

Leslie 3:01

relevant because what they're trying to do is basically identify who are the actual owners of LLCs and corporations . They're basically trying to promote more transparency around the owners in order to sort of eliminate the illegal activity that's going on with money laundering and financing , like terrorist crimes and networks and things like that .

Victoria 3:33

Okay , all right . So then it's just something . That's where because I know it's really easy , at least here in Michigan it's super easy to start an LLC . I mean , I've started I don't know how many , so it seems like they're just trying to maybe buckle down on that , maybe .

Leslie 3:50

So anybody can have an LLC . But what they're trying to do , you know it's pretty simple . When you have an LLC where it's one owner right , so that's a single member LLC it's pretty easy to identify who that owner is . So a lot of our LLCs , you know that , are legitimate businesses that are just out here trying to make a living . I don't think that we have any issues to worry about . They're really just trying to identify . When those structures start to get a little bit more difficult meaning like there's several shell companies , so this LLC owns this LLC and LLC B owns LLC D and it's . It gets a little harder for the government to actually identify who owns a company

Who This New Requirement is For

Leslie 4:49

who owns a company .

Victoria 4:49

Okay , I see . So do single member LLCs and multi-member LLCs . We all have to apply or abide by this requirement .

Leslie 4:55

Yes , absolutely so . All LLCs , corporations , small and medium-sized businesses , definitely have to submit this reporting requirement .

Victoria 5:05

Okay , and so what does that like ? How do you fulfill this ? What do you do ? Because I keep . I saw all these posts about it and everybody was like sharing the same post , saying you know , don't forget , you got to file this if you started . You know you have an LLC , but nobody said how to do it or where do you go to do it .

Leslie 5:24

Right , so I can provide

How to File Your BOI

Leslie 5:27

you . I mean , honestly , it's pretty simple . You need to have a valid ID it could be a passport , state ID or driver's license your name , address of all the owners of the business and you file it the owners of the business and you file it and I can provide the link to the website if you like . But you provide that information directly to the financial crimes enforcement . Their website is in it specifically for BOI reporting and this is for so LLCs that were formed prior to January 1st . You have this entire year to well , you've had this entire year to submit that filing and the deadline is January 1st of 2025 , but LLCs formed in 2024, . This filing should be reported within 30 days of the formation of a corporation or LLC .

Victoria 6:22

Oh , wow . So for those who maybe didn't realize this , that this was a requirement , and they started their LLC this year and they have not filed within that 30 days . What happens then ?

Leslie 6:36

So there's , I would say to just get it in as soon as possible . There is potential for financial , like some penalties . There may be penalties Because it's so new . It may be a penalty waiver , but my recommendation is to just get it in as soon as possible to avoid those penalties .

Victoria 6:58

And then this is something that we can do on our own , or should we hire someone like you to do this for us ? What do you recommend ?

Leslie 7:07

so honestly , it's a pretty simple filing . I think that most llcs and you know business owners of the llcs and corporations the information that they're asking is the ein number for your business and some personal information . If If you have maybe you know a little difficulty in answering some of the questions in the portal , then you may . This is something that my firm handles for clients if you need some assistance , but for the most part I think if it's one owner , maybe even two owners as a partnership , I think it's something pretty simple . Like I said before , it gets a little difficult when you have multiple LLCs that own that that are owned by other LLCs okay , all right , so , and it doesn't cost anything , I think , to file this .

Victoria 8:03

You can just go on and to this website and file it , okay , um , so then if we don't file , then there may be some financial implications

What Happens If You Do Not File On Time

Victoria 8:14

and like what type of what I saw ? It seemed like it was pretty expensive , like what they're proposing at least . So maybe this year maybe they won't do it , but it seemed like it was kind of high , yeah .

Leslie 8:27

So you can get fees up to . I saw anywhere from $500 per day , up to a $10,000 . Fine , oh , wow to a $10,000 fine for noncompliance and the failure to file , misrepresenting or concealing the requirement , you could face criminal penalties .

Victoria 8:49

Oh , wow , okay , Okay , well , yeah . So it sounds like it's pretty straightforward and it seemed like that everybody should be able to fulfill this requirement pretty easily . I'm thinking .

Leslie 9:02

Yeah , I would think so , but if you're , you know , uncertain about some of the questions in the portal , I would definitely encourage you to reach out to your professional or you know , obviously , my firm . If you don't work with , you know a lawyer or a CPA .

Leslie 9:17

Okay , is it long , like is it a long form that you have to fill out , or it's really not and I can say it takes about , say , if you're one member or two members . I don't see it being any longer than about 30 minutes to complete it , if that . Okay , when you're going through some of the questions and some of the terminology may be a little confusing if you're not familiar .

Victoria 9:46

But it's not , it's not a bad filing at all okay , and then you mentioned that ein , so do you have to have an ein in order to file this ? Or , if you have one , you just have to make sure that you you it with you .

Leslie 10:00

Yes , that's correct . If you don't like , if you're a sole proprietor , you can use your social security . If you're just an LLC sometimes we don't use our EIN when we're doing businesses or just operating as a sole proprietor you can definitely use your social security number .

Victoria 10:16

Okay , so a single member LLC that doesn't have an EIN , your social security number , okay , so , oh yeah , so a single member is somebody like like a single member llc that doesn't have an eim and just used okay , I see , that's good . Okay , and then any other type of business formation need this , or is this strictly for llc ? So if you have like an s corp or anything like that , yep .

Leslie 10:36

So a lot of times when you're an S-corp , you are an LLC or a corporation . S-corp is mainly just a tax status . Like some , companies are treated as S-corps for tax purposes . There are organizations that are exempt . So when we think in terms of small business , medium-sized businesses , those organizations are required to file this . But if you are a publicly traded corporation or a large corporation meaning like $5 million in revenue , 20 plus employees you are not required to submit this filing . Nonprofits are not required Banks but For purposes of our conversation , I think mainly most of our immediate group will probably be required to follow it .

Leslie 11:27

OK .

Victoria 11:28

OK , well , I think that kind of eases my mind a little bit , because , like I said , I just kept seeing stuff about it , but I did not see . It really wasn't clear . And then when you Google it , of course everything ends up being , you know , somebody trying to make some money off of it , and so you see all these random websites come up and you don't know which one is the actual one that you should be following . So thank you for supplying the link , for supplying the link , and I'll be sure to include that in the show notes for everybody that's listening , so that you'll go to the correct site to make sure that you get this file . So I just want to recap , then , everything that our listeners should have when they get ready to do this . So they definitely have to have their ID . I mean , are you like scanning this and uploading it too , or are you just getting the information off of it ?

Leslie 12:21

They want an actual copy of this ID .

Victoria 12:25

OK , so your ID or your passport , whatever identification you're using If you have an EIN , you want to have that number . For some people , maybe they got their EIN when they first got their LLC . They maybe don't know it . How can they get like a replacement ? Do you just call the IRS and get another one ?

Leslie 12:44

Yes , so you'll have to call the IRS and request them to send you a copy of that form , where it has your ID and filing requirements

Annual Report and EIN Requirements

Leslie 12:54

.

Victoria 12:54

Okay , do you need to upload that form to this filing system , or you just need the number ? You just need the number .

Leslie 13:01

Ok , I mean honestly , if you've been filing your taxes and if you use your EIN for business and any kind of capacity you know , it shouldn't be hard to find .

Victoria 13:11

OK , so they need the ID , their EIN . Is there anything else that they should have prepared ? Any type of financial documents or anything they should have ready else that they should have prepared , like any type of financial documents or anything they should have ready .

Leslie 13:22

No , just one of the things that stood out was so say , if you are like the legal name of the business and if you're using like a trade name or a DBA , just have all that information ready to input into that system .

Victoria 13:37

Okay , and so no filing number . Like I know , here in Michigan we have that number like your file number with Laura or whatever your state agency is . That you know , licenses , the LLC . You don't need any of that . No , no , okay , okay , okay , all right . Well , it sounds pretty good then . Okay , so I feel a little bit easier , better about logging on and doing it .

Leslie 14:03

Yeah , it's new , so a lot of people are , you know , have been a little nervous about it , but I would say take a shot at , you know trying to . You know send in the report and if not , then you know reach out if you . You know , if you don't understand some of the terminology .

Victoria 14:20

Okay , All right , and you'll be able . You'll be sure to include your information so I'll have that for people . So if they have any questions about anything , they can definitely reach out to you and to your team to help them with some of that terminology , because I know that I feel like some people that have LLCs they just get them and don't really think about everything that is involved in it . Like , in addition to that , we have the annual reporting that's getting ready to come up and I know sometimes people don't do . I'm guilty of that . I've done that in the past Didn't know what it was . I got my LLC , didn't know what it was and didn't file my annual report . Then I went into not good standing . Then you got to file all the old ones and file another form to get back in good standing and it was with the previous LLC that I had . So but those are things that you can do also with the junior . Team does as well , absolutely . Team does as well , absolutely Okay .

Leslie 15:17

Yeah , and just kind of to piggyback off . You know the annual report and sometimes when you are applying for maybe a city or a state grant , if you're not in good standing then you won't even qualify to even apply for that grant . So you have to you know make sure we're keeping up with all of our requirements for maintaining a solid business .

Victoria 15:39

Yeah , can we just talk about the annual report real quick before we finish ? Because when you hear annual report , right , I was like , oh my God , I don't have . You know , I started . This was like 10 years ago . I started an LLC . I wasn't really doing anything with it , I had it . Okay , I have an LLC . And when you hear annual report , I'm thinking like this big , huge thing , you want my bank statements and everything , what , at least here in Michigan ? What's the annual report ? Let the people know what the annual report is .

Leslie 16:10

The annual report is just basically you going to the state and saying year over year , yes , I'm still in operation , yes , these still are the members , or I am still the only member that owns this or is operating this LLC , updating any address information or if your resident agent changed , and that's it . You're basically just letting the state know hey , I'm still operating in the state of Michigan . It's really as simple as that . It's no financial information . The fee , depending on the type of organization you have , could be anywhere from 10 to 25 or $50 a year , and that's it .

Victoria 16:48

Yeah , and when I found that out and I had realized I don't have that LLC anymore , but when I realized that I had I mean it was years I had to like and I realized that I had I mean it was years I had to like I want to say I had to complete maybe like eight or nine of them and then you had to file the other form to get the restoration of good standing , which was like $50 . So , yeah , so I ended up spending about $500 to get that back in good standing , when I'm like I could have just spent this 25 every year . If I have just known that this annual report is literally like a one-page document that I'm just saying , yep , I'm still victoria and yep , this is still the name , is just me , and I'm still here in michigan and you know what they sent .

Leslie 17:35

Just make sure on the site when you go in , just make sure the email is current because they'll send you a reminder . Starting , I want to say , november . They start sending a reminder to say , hey , your annual report for 25 is due by February .

Victoria 17:49

So just make sure To your register agent and I think I was using . It was a mess , but yeah , that's why we have people like you to . They're supposed to set these things up for us . So that is done the right way , because you can be your own register agent . But if you don't understand these things or if you're not , like you said , checking your email , you're just using a random email , you will miss these communications from them and it can end up costing a lot of money to get this stuff back situated .

BOI Filing Assistance and Resources

Victoria 18:20

Absolutely All right , well , perfect . Thank you so much , leslie , for jumping on real quick to give everybody that information . I will include Leslie's information in the show notes for this episode . You'll be able to find all the show notes and a full transcription of this episode , as well as the link to the BOI filing at my website , thepeercollectivecom slash podcast . You'll see the episode there and if you have any questions as you're filling out your BOI information form , be sure to reach out to Leslie and she and her team will be more than happy to assist you . Thank you , guys , so much for listening in and I'll catch you on the next episode .