Filing Beneficial Ownership Information (BOI) is essential for many companies as part of the government’s effort to increase transparency and prevent illicit financial activity. The BOI filing deadline can often be challenging to meet due to various business, operational, or compliance reasons. In some cases, businesses may need to consider requesting a one-year delay on filing their BOI. Below, we explore the circumstances under which you might request this delay and the reasons it may benefit your business.
1. Significant Operational Changes
When: If your business is undergoing significant changes, such as restructuring, mergers, acquisitions, or leadership turnover, these shifts can create complexities in establishing or verifying accurate ownership details.
Why: Accurate and up-to-date ownership information is required for BOI filings. During times of organizational change, a delay allows more time to align the filing with your company’s new structure and ownership hierarchy, reducing the risk of filing errors and possible penalties for incorrect information.
2. Resource Constraints and Limited Capacity
When: Small businesses, startups, or companies with limited administrative resources may find it challenging to allocate time and personnel to gather the detailed ownership information required for the BOI filing.
Why: A one-year delay provides these businesses with more time to prepare while managing other compliance and operational priorities. This can be particularly important for organizations that are already managing tight budgets and limited staffing capacity.
3. Inability to Obtain Accurate Ownership Information
When: Businesses may sometimes struggle to obtain accurate and complete information on all beneficial owners due to ownership structures, including foreign owners or large, complex family structures with diverse assets.
Why: A delay can provide extra time for due diligence and contact with beneficial owners who are geographically dispersed or harder to reach. This ensures that the BOI filed is comprehensive and meets the regulatory requirements.
4. New or Evolving Regulatory Requirements
When: Regulatory frameworks around BOI requirements are constantly evolving. Sometimes businesses need additional time to fully understand the new requirements and implement the necessary internal processes to comply.
Why: Delaying your filing for a year allows you to navigate any new regulatory expectations thoroughly, thus minimizing the likelihood of errors and improving compliance.
5. Protecting Sensitive Information in Complex Ownership Structures
When: If the business has a complicated or sensitive ownership structure, such as trusts or layered corporate entities, it may take longer to document and provide BOI data accurately and transparently.
Why: A delay can help companies avoid rushed filings that may inadvertently disclose sensitive information or overlook critical details, giving them time to carefully document and protect all necessary data.
6. Challenges with Filing Technology and Infrastructure
When: Some businesses face technological issues in gathering or submitting the required information, especially if there is a transition to a new information system or database.
Why: A delay allows time to implement necessary technological solutions or troubleshoot any existing system issues, ensuring accurate, timely filings without technological errors.
How to Request a BOI Filing Delay
If your business meets one or more of these conditions, requesting a BOI delay can offer much-needed flexibility. Here’s a quick look at the steps involved in making the request:
1. Identify and Document the Reason(s) for Delay: Be clear about why you need the delay and document any relevant factors that hinder timely filing.
2. Prepare Supporting Documentation: Gather any supporting documents that back up your request, whether they are emails, internal memos, or official restructuring documents.
3. File the Extension Request with Appropriate Authorities: Submit your request in compliance with the BOI requirements. Include all supporting documentation and ensure that your request is submitted before the original BOI deadline.
Key Considerations When Requesting a Delay
A delay request isn’t guaranteed approval, so it’s crucial to clearly communicate the necessity of additional time and how it will ensure accuracy in the BOI filing. Always keep in mind that authorities prioritize accurate and thorough information over meeting the initial filing deadline, especially in cases where filing prematurely could result in misreporting.
A one-year delay on BOI filing, if managed effectively, can enable businesses to remain compliant without compromising on the accuracy and quality of the information they report. This additional time could be the difference between a rushed filing and a comprehensive one that protects the company’s interests and reputation in the long run.
How or where would I find a template for requesting the late filing?
We do offer the letter template for $25.00. Please contact us at this LINK