[TfTi] Indie Authors: Don’t Forget to File Your BOIR!

Last week, I received two different newsletter reminders and saw an Instagram reel about BOIRs. I took the hint and filed mine, so I thought I should share what I learned.

We say it all the time: When you publish a book, you are starting a business — the business of authorship.

And one step that we urge indie authors to take is to form a legal business entity, if they don’t already have one. It’s usually going to be a simple, single-owner LLC that will serve as the publisher of your books, own the ISBNs, obtain an EIN from the IRS to use as your business tax ID, and so on.

This post is not about those details, however. It’s about a new requirement that all businesses must comply with under the Corporate Transparency Act that took effect in January 2024 (text here).

The statute requires most business entities, including single-owner LLCs, to file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network, another arm of the Treasury Department — it’s dubbed “FinCEN” right there in the statute.

Does this law really apply to me?

That was my first question, too. The answer for me — and for most indie authors who form a business entity — is most likely yes.

The purpose of the law, according to FinCEN’s FAQ page, is “to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.”

To weed out the bad actors, FinCEN wants to know who owns all business entities operating in the US, with some exemptions for government bodies, large entities that are already highly regulated, like banks, securities dealers, utilities, and a few others not relevant to indie authors.

The reporting requirement applies to:

• “Domestic reporting companies … corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States” and
• “Foreign reporting companies … entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States”

If you’re an indie author and you’re not also a venture capital adviser or running a bank, your LLC is probably a “reporting company” required to file a BOIR.

What is “Beneficial Ownership Information”?

Basically, FinCEN wants to know who owns and controls each entity. So first, you need to identify your company. You do this by providing basic details that you will have from the forms you filled out when you set up your LLC or other entity. Usually, that will have been an online form on the Secretary of State’s website in your state and an online application for your EIN from the IRS. The receipt or confirmation documents you received or downloaded when you completed registering should have everything you need for the company part of your BOIR.

The other main part asks for information about the beneficial owner(s) of the company.

The FinCEN FAQs tell us:

“A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control … over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests ….”

That’s you, if you’ve set up a single-owner LLC, because you have full control and a 100% ownership interest in the company.

How do I file a BOIR?

It’s pretty straightforward. You start by going to the FinCEN e-filing page:

After you click the “Get Started” button, you will have the choice of an online form or a fillable PDF. I used the online form, which was mostly self-explanatory. If you have questions, the FAQ page should answer them.

When do I have to file a BOIR?

This one depends on when you formed your LLC or other entity. There are three possible deadlines.

If yours was formed before the statute took effect on January 1, 2024, you have until January 1, 2025.

If it was formed during 2024, you have 90 days from the day you received notice that your company’s formation was effective. The receipt or confirmation you got from your state’s Secretary of State website should give you the starting date.

For those forming their indie publishing entity in 2025 or after, you’ll have just 30 days from that notice confirming the effective date of your company’s formation.

What happens if I don’t file a BOIR?

Bad idea.

As my banner image for this post hinted, the civil and criminal penalties for failing to file your BOIR or filing false information are draconian. Remember, the Corporate Transparency Act is aimed at “bad actors” — money launderers, arms dealers, drug cartels, sanctions violators, and the like, who use shell companies to hide their illegal financial transactions.

• The civil penalty can be up to $500 per day “for each day that the violation continues or has not been remedied;” and
• The criminal penalties can be a fine of up to $10,000, imprisonment for up to 2 years, “or both”

In addition, the FinCEN FAQs say these penalties can be applied to “both individuals and corporate entities” — i.e., both you and your LLC.

Now, the statute does say the penalties apply only to those who “willfully” fail to report. It says, “the term ‘willfully’ means the voluntary, intentional violation of a known legal duty.”

But trust me, you do not want to be the test case arguing that you didn’t know about FinCEN or the BOIR requirements. Ask a lawyer how much it might cost to defend you and make that argument for you, if FinCEN chose you to be their example for others. The penalties or fines could seem paltry in comparison.

And the good news — as I hope I’ve shown — is that it’s just not that hard to comply.

Make time to file your BOIR today.