Thanks to the Corporate Transparency Act (CTA), most business owners in Delaware (and other states across the U.S.) need to file a Beneficial Ownership Information (BOI) report. This report includes important information about the business itself and its owners and beneficiaries and requires filing with the Financial Crimes Enforcement Network (FinCEN).
Naturally, there’s a deadline for filing your BOI report with FinCEN. Given the many other responsibilities involved with running a Delaware business, you might delay your FinCEN filing week after week and month after month, only eventually filing at the last minute. But is that a wise move? The short answer is “No,” but keep on reading for a longer and more in-depth explanation.
How to File Your BOI Report in Delaware
We’ll begin with the basics of how FinCEN filing actually works in Delaware, as this is a new process that was only officially introduced in January of 2024. As such, many business owners have never filed a BOI report before and may be unsure about how to do so. The first thing to know is that your report must be filed online via FinCEN’s own BOI E-Filing System.
Here’s how FinCEN filing in Delaware works, step-by-step:
- Identify those who fall into the category of “beneficial owners” for your business. Specifically, anyone who directly or indirectly owns at least 25% of the business’ equity interests counts as a beneficial owner, as well as those who have significant control over the company.
- Collect all relevant information regarding your company’s beneficial owners. Note that you’ll need not only names and addresses for each person but copies of some form of photo ID for each one, too.
- Enter all the requested information online using the e-filing system. You can type it all in directly via your internet browser, or you can submit a PDF version with all the details. When you’re done, simply submit the report.
Who Needs to File a BOIR in Delaware?
Owners of the following businesses will need to complete BOIR FinCEN filing in Delaware:
- Corporations
- LLCs
- Any other entity that was created by filing a document with the Delaware Secretary of State
Note that there are exceptions in place for certain business entities, like publicly traded companies and government entities.
When You Need to File Your BOI Report
Next, deadlines. The BOI report has to be filed prior to the set deadline if you wish to avoid incurring any penalties (more on that later). The specific deadline for each Delaware business varies depending on when the business was established:
- For all businesses formed prior to 2024, the deadline is January 1, 2025.
- For businesses formed during 2024, the deadline is 90 days after receiving notice that its creation/registration has been effected.
- For businesses formed in 2025 and onward, the deadline is 30 days after receiving notice.
Is It Worth Waiting Until the Last Minute?
Returning to our titular question: should you leave it until the very last minute to file your BOI report in Delaware? Let’s say, for example, that your business was created in 2022, so you need to file the report by January 1, 2025. Is it worth waiting until December 2024 to log onto the e-filing system and fill in the info?
As touched on in the introduction, the very quick and simple answer is “No.” It simply isn’t wise to wait until the last minute when filing such an important form as this. There are numerous risks associated with last-minute filing, and your business could pay a hefty fine if anything goes wrong when you finally decide to file.
The Risks of Last-Minute Filing
There are some possible explanations for late or even last-minute filing. You might be simply too busy to get around to filing your BOI report, for example. Or there are some business owners who struggle to understand exactly what info they need for their BOIR or some who even aren’t aware of the filing deadlines. However, it’s never a good idea to file late. Here’s why:
Fines
In Delaware, as in other states, if you miss the deadline for filing your BOIR, you’ll immediately face the prospect of hefty fines. Those fines can rise to around $500 per day, and they add up for every single subsequent day you fail to file. That means, if you’re just a single week late to filing your BOI report, you could be looking at thousands of dollars to pay.
Criminal Penalties
There’s also a risk of criminal penalties, which are even more severe than the aforementioned civil fines, for failing to file your BOI report on time. If you fail to file it and ignore requests to do so in the days and weeks that follow, you could face the harshest penalties, including up to two years behind bars and fines totaling up to $10,000.
Unexpected Delays
Of course, there’s a difference between filing last minute and filing late. You might be thinking that you won’t have to worry about any fines or penalties as long as you file before the deadline. However, the issue with waiting too long is that you might face an additional unexpected delay when you eventually decide to gather the info and fill in your form. Because of that, you might miss the deadline.
Risk of Inaccuracies
Building on the previous point, another result of waiting too long to file your form is that you could end up filling it out incorrectly. You might not have enough time to read the requirements, gather all the data you need, and submit your form with inaccuracies about the names and details of beneficial owners. Incorrect forms can also lead to penalties that you would certainly prefer to avoid.
How to File Your BOIR Quickly and Efficiently
As you can see, the risks of last-minute FinCEN filing in Delaware simply aren’t worth it. No business owner wants to have to deal with fines, penalties, and other issues. Instead, it makes much more sense to simply get on with your BOIR filing ahead of time, completing your form with days, weeks, or even months to spare, if you’re able to do so.
Let’s look at some helpful tips and strategies that should assist you in filing on time and with minimal fuss.
Be Proactive to Get Ahead of the Game
First, take a proactive mindset to your BOI report. It’s easy to say “I’ll do it later” or push back the process over and over. This is a common mistake that many business owners make, and the “later” date never actually comes, as they continue to delay their reporting or even forget about it entirely until it’s too late.
To avoid this, be organized. Understand the specific steps and processes involved in BOI reporting, do your research to find out what’s involved, and get ahead of the game by contacting beneficial owners ahead of time. Get the info you need and set a clear date to file your form, as much in advance of the deadline as you can. That way, even if you miss it by a day or two, you’ve still got time to spare.
Work With the Pros
One of the reasons why many business owners may delay or file their BOI reports last minute is because they just don’t fully understand how to fill out their reports and file them correctly. This is a new process, after all, as explained earlier on, and it can seem complicated or tricky for first-timers. But help is at hand in the form of FinCEN filing professionals.
Expert filing agencies can assist you with your report in various ways. They’ll help you understand whether or not you need to file, the filing deadlines, the risks of failing to file on time, and how exactly to complete your report. They can even do it all for you, saving you a lot of time and hassle, while providing much-needed peace of mind.
Use BOIR Software
These days, in our technological age, there are apps, programs, and digital solutions for almost everything. In the world of business, you can always find some sort of app or software that’ll help out with any situation, from scheduling apps to CRM suites that help you manage your customers. There’s BOIR software, too, designed specifically for BOI reports.
With BOIR software, the whole process of BOI reporting gets easier. The best programs have a range of helpful features that speed up and simplify the filling out of each form. They provide alerts for any non-compliance, let you save drafts to return to and complete later, and can even auto-fill certain sections of the report form for you.
Complete Your FinCEN Filing in Delaware Today
If you’re one of the many business owners based in Delaware who needs to complete a BOI report sometime soon, the message is clear: don’t delay. The longer you wait, the bigger the risk of filing incorrectly or missing the deadline. Get the info you need now and consider reaching out to pros or using professional software to help you file with FinCEN without a hitch.
