BOI Report Cost: Handling Filings In-House vs. Through a Third-Party Provider
Adhering to the Corporate Transparency Act (CTA) by filing accurate beneficial ownership information (BOI) reports incurs costs, whether managed independently by a reporting company or offered as a service by a third-party service provider.
For companies handling their reporting needs in-house, the costs will include setting up secure storage systems for BOI reports, reminder systems for updates from beneficial owners, and monitoring systems for changes in beneficial ownership. Third-party providers, on the other hand, must account for the expenses of developing systems to file for their clients and other operational costs.
Beyond financial costs, both approaches require significant time investments for setup and ongoing management. This article will discuss BOI report costs for independent management and third-party services. It will also outline how Harbor Compliance can optimize the costs of BOI reporting.
Beneficial Ownership Information Reporting (BOIR) Obligations Under the Corporate Transparency Act
Originally, the Corporate Transparency Act (CTA), enacted as part of the National Defense Authorization Act, required certain corporations, limited liability companies (LLCs), and other entities to report information on their beneficial owners and company applicants to the government. This legislation took effect on January 1, 2024, with the goal of increasing corporate transparency and preventing financial crimes.
Unlike other reporting obligations, the CTA does not require companies to submit annual BOI reports. However, under the original framework, any corrections or updates to previously filed BOI reports were expected to be submitted within 30 calendar days of a change. FinCEN had outlined potential penalties for failing to meet these deadlines, including fines and, in some cases, criminal charges.
While the status of BOI reporting remains uncertain following recent legal challenges, entities must still stay informed about the potential financial and operational impacts of beneficial ownership reporting requirements.
Exploring BOI Report Costs for In-House Management
According to FinCEN guidelines, companies can manage their BOI reporting independently or outsource it to a third-party service provider. For entities who are considering handling the entire reporting process in-house, from preparing BOI reports to filing, there are several key costs to consider:
- Cost of preparing and filing reports with the FinCEN
- Cost of implementing a secure storage system for BOI
- Cost of establishing a reminder system to ensure timely updates
- Cost of implementing a monitoring system to track changes in company information
1. Cost of Preparing and Filing Reports With the FinCEN
There is no fee associated with submitting reports directly to FinCEN through the Beneficial Ownership Secure System (BOSS) portal. The real cost lies in the time required to prepare and file these reports.
FinCEN estimates that the filing process takes around three hours to complete. Online filing can present additional challenges, such as issues that may disrupt data synchronization and having to redo the report from scratch when updated or corrected reports are required.
For the sake of providing a clear estimate, we calculated the costs based on the current minimum wage. Our calculations show that preparing and filing BOI reports in-house costs between $20 and $40. The time and resources spent handling this independently could be allocated to other administrative tasks, which may affect overall operational efficiency.
2. Cost of Implementing a Secure Storage System for BOI
Since BOI reports contain sensitive personally identifiable information (PII), it's crucial to implement a secure storage system to protect this data. Organizations can choose between two main options for setting up a secure storage system:
- Developing a private cloud system
- Partnering with a public cloud service provider
The table below compares the cost of both options:
| Cost | Private Cloud Storage | Public Cloud Storage |
|---|---|---|
| Initial setup (design and delivery) | $75,000–$600,000 | $200–$600 (1TB/year) |
| Maintenance and support expenses | $1,500–$6,000 | Included in subscription |
3. Cost of Establishing a Reminder System To Ensure Timely Updates
It's important to set up a reminder system to periodically check if beneficial owners need to update their information. This will ensure that updated reports are filed before the 30-day reporting deadline.
Setting up reminder systems can be done by either creating a custom solution from scratch or using an existing appointment reminder application.
The costs associated with these approaches are outlined in the table below:
| Cost | In-House Reminder System | Third-Party Application |
|---|---|---|
| Initial setup | $10,000–$60,000 | $0–$360 (per year) |
| Maintenance | $2,000–$12,000 | Included in the yearly subscription |
4. Cost of Implementing a Monitoring System To Track Changes in Company Information
In addition to a reminder system, a monitoring system is needed to track changes in company records and BOI. This system alerts you when modifications are made to leadership and ownership information so you remain up-to-date with reporting obligations.
Organizations can either develop an in-house monitoring system to track these changes or adopt a pre-built solution with monitoring features. The table below shows the cost incurred by both approaches.
| Cost | In-House Monitoring System | Pre-Built Solution |
|---|---|---|
| Initial setup | $60,000–$150,000 | $60–$300 (per user per year) |
| Maintenance cost | $2,000–$12,000 | Included in the yearly subscription fee |
Optimizing BOI Report Costs With Harbor Compliance
Adhering to the CTA's reporting obligations involves significant financial and time investments. Entities must prepare reports, establish reminder systems, and monitor changes to BOI to ensure timely updates. Reporting companies are turning to third-party service providers like Harbor Compliance to simplify this process.
Harbor Compliance specializes in helping single and multi-state entities remain in good standing by adhering to different regulatory requirements. Our dedicated BOI Reporting Service streamlines the filing process with FinCEN and sends automated reminders to entities to ensure they update their BOI within the reporting deadline.
Additionally, our proprietary software's Records Manager module facilitates the centralized and secure storage of ownership and leadership information needed in BOI reports.
Benefits of Using Harbor Compliance's BOI Reporting Service
While managing the entire BOI reporting process internally is feasible, it requires significant time and resources, which can be better allocated elsewhere. Partnering with Harbor Compliance streamlines this process and offers the following benefits:
- Peace of mind knowing your reporting needs are handled by professionals who understand complex regulatory frameworks.
- Automated reminders to ensure that your beneficial owners regularly review and update their PII.
- Freed-up time that would have been used for handling the process internally.
In addition to our BOI Reporting Service, you can also opt for our Records Manager, which is sold separately (with our proprietary Software Suite). This tool collects and manages ownership and leadership information and offers secure storage for company records.
How To Order Harbor Compliance's BOI Reporting Service
Harbor Compliance's BOI Reporting Service caters to single reporting entities and clients managing multiple entities. We charge an annual fee that covers the cost of filing the initial report and submitting up to four corrected and updated BOI reports per year.
To order our BOI Reporting Service, follow these steps:
- Visit Harbor Compliance's service ordering wizard.
- Select your entity type (single or multiple).
- Provide relevant details, such as your company name and contact details.
- Submit the form to finalize your order.
Additional Services by Harbor Compliance
Harbor Compliance's services extend beyond simply assisting with BOI filings and providing software solutions. We offer a comprehensive suite of regulatory management solutions tailored for entities operating throughout the U.S. The list below outlines the different services we provide:
| Category | Services |
|---|---|
| Registered agent service | We have offices across the U.S., allowing us to provide our services and act as your registered agent regardless of your location. Rely on us to appoint or change your current agent if needed or use our service to streamline your foreign qualification process. |
| Document filing and retrieval | We help businesses file their initial and annual reports to the designated secretary of state office. We also offer drop-off filing services and assist entities in securing certified copies and certificates of good standing. |
| Business licensing support | We assist organizations in filing and obtaining business and industry-specific licenses (construction, engineering, etc.) required to operate in the U.S. |
| Nonprofit formation | We help nonprofits file for incorporation and the 501(c) tax exemption. |
| Entity lifecycle management | We assist entities in filing for incorporation, foreign qualification, LLC formation, name reservation, amendment, and reinstatement. We also help businesses manage Doing Business As (DBA) and withdrawal and dissolution requirements. |
| Tax registration | We help organizations secure their Employer Identification Number (EIN) and manage their payroll tax accounts. We also help entities with their sales and use tax registrations. |
BOI Report Cost FAQs
Below, we will answer some frequently asked questions about BOI report costs. To learn more about BOI reporting, visit Harbor Compliance's information center.
No. There is no filing fee for submitting BOI reports directly through FinCEN's BOSS portal.
The primary costs for reporting companies managing BOI reports independently include acquiring a secure storage system for BOI reports, setting up a reminder system for beneficial owners to ensure timely updates, and implementing a monitoring system to track changes in organizational structure.
Managing BOI reporting independently involves developing and maintaining systems for secure storage, reminders, and monitoring, as well as the time required for these tasks. Outsourcing to a third-party provider involves service fees but frees up the time and effort that would have been spent handling reporting obligations in-house.
Leveraging Harbor Compliance's Services for Beneficial Ownership Information Reporting (BOIR)
The CTA has introduced new obligations for entities operating in the U.S., adding to their regulatory responsibilities. These BOI reporting obligations entail both monetary and non-monetary costs.
Partnering with a third-party provider like Harbor Compliance saves the time and resources that would otherwise be spent managing these obligations independently. Order our BOI Reporting Service, and we will handle the filing process and send confirmation once your reports have been submitted.
To get started with our services, use our FREE Harbor Compliance Score™ to assess your current regulatory standing. Afterward, you can schedule a demo session to see how our services can help your organization maintain good standing across the U.S.
