BATON ROUGE – Business owners are facing a crucial new compliance deadline this year. You may have seen it trending on social media and questioned whether it was real – it is.
According to the Secretary of State’s office, all businesses classified as “reporting companies” under the Corporate Transparency Act must file a Beneficial Ownership Information Report with the Financial Crimes Enforcement Network by December 31, 2024.
This requirement applies to entities formed before 2024, including LLCs, corporations, and similar structures, as well as foreign entities registered to do business in the U.S.
What Is the BOI Report?
The BOI Report is intended to combat financial crimes such as money laundering and tax evasion by improving transparency regarding who owns and controls companies. Businesses are required to disclose key details about individuals with significant ownership or control. This includes names, addresses, birthdates, and other identifying information about the owners or those exercising substantial control over the company.
Certain companies, such as “large operating companies” that meet specific criteria, are exempt from this requirement. A company is considered a “large operating company” and is exempt from reporting if it:
- Employs more than 20 full-time employees in the U.S.
- Operates from a physical address within the U.S.
- Filed a federal income tax return showing over $5 million in gross receipts or sales (excluding non-U.S. income) in the previous year.
Why Is This Happening?
The CTA was enacted to create a centralized registry of beneficial ownership data. This registry will assist U.S. law enforcement agencies in investigating financial crimes, protecting national security, and upholding global transparency standards.
Serious Penalties for Non-Compliance
Failing to file the BOI Report or submitting false information comes with steep penalties:
- Civil penalties: Up to $591 per day for every day the report is late or inaccurate (adjusted annually for inflation).
- Criminal penalties: Fines of up to $10,000 and imprisonment for up to two years.
Where to File and How to Get Help
Businesses must submit their BOI Reports electronically through the FinCEN filing portal, available on FinCEN’s official website. Guidance and instructions for completing the report are also provided there.
According to the Secretary of State’s office, “Reporting companies should not report beneficial ownership information to any organization except FinCEN. Websites are often set up to spoof legitimate sites.”
Business owners are strongly encouraged to consult with legal or tax professionals to ensure compliance and avoid penalties. Given the complexity of these new requirements, early action is highly recommended.
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