Carpenters, like many other professionals, may wonder about their obligations regarding various legal and administrative requirements. One such requirement that has caused some confusion is the BOI report. The term “BOI report” refers to the Beneficial Ownership Information report, a filing requirement under the Corporate Transparency Act (CTA) aimed at increasing transparency and combating illegal activities such as money laundering and terrorism financing.

Understanding the BOI Report

The BOI report is part of an effort by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, to ensure that the true owners of companies are known to the government. This report requires entities to disclose information about their beneficial owners – those who own or control at least 25% of the company or have significant influence over it.

Applicability to Carpenters

Whether a carpenter needs to file a BOI report depends largely on the nature of their business structure:

Sole Proprietors:

No BOI Report Required: If a carpenter operates as a sole proprietor, there is no requirement to file a BOI report. Sole proprietorships do not fall under the Corporate Transparency Act’s purview because they are not considered separate legal entities from their owners.

Partnerships, Limited Liability Companies (LLCs), and Corporations:

BOI Report May Be Required: If a carpenter operates their business through a partnership, LLC, or corporation, they may be required to file a BOI report. This requirement applies to any business entity that is created by a filing with a secretary of state or similar office, and therefore includes most corporations, LLCs, and partnerships.

Key Requirements for the BOI Report

For those carpenters who operate their businesses as LLCs, corporations, or partnerships, here are the key details to know about filing the BOI report:

• Information to Be Reported: The report must include the names, dates of birth, addresses, and identification numbers (e.g., driver’s license or passport numbers) of the beneficial owners.
• Filing Deadlines: The deadlines for filing the BOI report can vary. New entities must file the report within a certain time frame after their formation, while existing entities are given a specific deadline to comply.
• Updates: Any changes in beneficial ownership must be reported, typically within a set period after the change occurs.

Exemptions and Special Considerations

There are several exemptions to the BOI report filing requirement, which could be relevant to some carpenters:

• Large Operating Companies: Entities with more than 20 full-time employees in the U.S., over $5 million in annual gross receipts, and an operating presence at a physical office in the U.S. are exempt from filing.
• Inactive Entities: Entities that were in existence before January 1, 2020, and that have not engaged in active business since then are exempt.
• Certain Regulated Entities: Some entities that are already subject to substantial federal or state regulation (such as banks or securities brokers) are also exempt.

In brief, whether a carpenter must file a BOI report depends on the legal structure of their business. Sole proprietors are exempt, while those operating through partnerships, LLCs, or corporations are generally required to comply with this reporting requirement. It is essential for carpenters and other small business owners to understand these obligations to ensure compliance and avoid potential penalties.

Carpenters uncertain about their specific obligations should consult with a legal or financial advisor to get tailored advice based on their unique business circumstances. This will ensure they meet all relevant legal requirements and can continue to focus on their craft with peace of mind. The good news? Propel offers a total FinCEN compliance solution to get your BOI report filed today.