How To Choose BOI Reporting Software—Essential Features and Key Considerations
The Corporate Transparency Act (CTA) has introduced the prospect of beneficial ownership information (BOI) reporting obligations for millions of companies in the U.S., prompting many entities to seek BOI reporting software to streamline this process.
BOI reporting software can simplify the collection of data needed for accurate reporting but also raise concerns about data security and privacy due to the sensitive nature of the information contained in these reports. Additionally, the tool must support iterative reporting, allowing for easy corrections and updates to BOI reports when needed. Given these considerations, selecting the right tool requires careful thought.
In this article, we'll explore the best BOI reporting software options and compare them to the merits of comprehensive compliance solutions. We'll also discuss how Harbor Compliance's services and software can help you meet the CTA requirements and streamline your BOI reporting process.
The Evolving Impact of the Corporate Transparency Act
Originally introduced as an anti-money laundering and anti-terrorist financing measure, the Corporate Transparency Act (CTA) aimed to prevent financial crimes by requiring companies to disclose information about their beneficial owners and company applicants. Since January 1, 2024, many entities have filed their initial beneficial ownership information reports (BOIR), with others expected to do so over time.
While the CTA does not mandate annual submissions, the original framework outlined that entities would need to update or correct their reports within 30 days of any changes to previously submitted information. These updates could be triggered by:
- A beneficial owner moving to a new address
- A company changing its name
- A beneficial owner's name changing (e.g., due to marriage or divorce)
- The appointment of new senior officers
With various events potentially requiring updates, many entities have explored technology solutions and professional services to simplify the reporting process. Although recent legal challenges have introduced uncertainty about enforcement, staying informed on potential reporting expectations remains important for businesses.
What Is BOI Reporting Software?
BOI reporting software is designed to collect and securely store information from beneficial owners and company applicants, making it easier to generate accurate BOI reports. These tools are gaining popularity as they offer a more secure and efficient way for individuals to provide sensitive information, bypassing the need to share personal details with company employees.
Some key features of effective BOI reporting software include:
- Data collection and management—The software should efficiently gather the necessary information for BOI reports and ensure this data is stored securely.
- Reminders and alerts—To keep records up-to-date, the tool should periodically send reminders to beneficial owners and applicants, prompting them to update their information when needed.
- Capability to work with tax and legal teams—A good beneficial ownership information software should be able to work seamlessly with a business’s tax or legal advisors.
6 Key Factors To Consider When Selecting a BOI Reporting Software
Choosing the right BOI reporting software is much more than just picking the first option available. Since BOI filing is a relatively new requirement in the U.S., there are still many unanswered questions, and reporting guidelines will likely evolve with time.
As such, before your company invests in any tool, there are six key factors you should consider:
- Data security
- Ability to adapt to frequent changes
- Extent of collaboration
- Data collection efficiency
- Ability to accommodate state-level reporting needs
- Ability to adapt to changing requirements
1. Data Security
BOI reports require beneficial owners and company applicants to disclose sensitive, personally identifiable information (PII). Sending this information via email poses significant risks. Therefore, it's essential to select a tool that can securely collect and manage PII.
The software you choose should have strong security protocols to protect against breaches and unauthorized access, ensuring that your sensitive data remains safe and confidential.
2. Ability To Adapt to Frequent Changes
Often, you only need to modify a single piece of information, such as when a beneficial owner changes their name due to marriage or divorce. Your BOI reporting software should be able to securely store previous versions of reports, allowing you to easily make changes to specific fields without having to recreate the whole document.
3. Extent of Collaboration
When choosing a tool, consider the extent of collaboration it provides. While some companies might consider engaging CPAs and attorneys to assist with their BOI reports, it's important to note that most CPAs and attorneys do not handle the filing process themselves. Instead, they provide essential information and guidance.
For that reason, it's important to select a tool with strong collaborative features. This will allow attorneys and CPAs to easily share the necessary information and work with your team.
4. Data Collection Efficiency
According to FinCEN, preparing initial BOI reports takes approximately three hours. This is primarily due to gathering information, which can be a time-consuming task. To address this challenge, the software should streamline the data collection process from beneficial owners and company applicants. This will reduce the time and effort required to complete each report.
5. Ability To Accommodate State-Level Reporting Needs
In the coming years, it's likely that the CTA will not be the only regulation mandating BOI reporting. State-level legislation like the New York LLC Transparency Act (NY LLCTA), which requires LLCs in New York to disclose their beneficial owners to the state, illustrates a trend towards more localized reporting requirements.
The chosen tool must adapt to federal and state-specific requirements. This ensures your entity will adhere to new regulations as they emerge.
6. Ability To Adapt to Changing Requirements
As the CTA is still a relatively new legislation, modifications to reporting requirements will likely occur. When selecting a BOI reporting software, make sure it comes from a provider who understands the regulatory landscape and can adapt the software accordingly when needed.
Dedicated BOI Reporting Software vs. Comprehensive Compliance Solutions—Which To Choose
Dedicated BOI reporting software is a relatively new category of tools, given that BOI filing requirements were only introduced in the U.S. recently. These solutions are specifically designed to handle BOI reporting needs.
Entities use these tools because they provide a streamlined and straightforward solution to BOI reporting. This is particularly beneficial for firms who want a specialized tool without the additional complexities of compliance features.
Contrastingly, comprehensive compliance solutions provide features that extend beyond mere BOI reporting. This is especially useful since these solutions:
- Provide a unified platform to manage several regulatory obligations such as annual report filing and registered agent services, which entities are also expected to adhere to
- Can be scaled to accommodate growing organizations' needs
- Often feature integrated data systems that enable seamless data sharing and consistency across different reporting obligations.
Considering how most entities face regulatory requirements beyond BOI reporting, it is often beneficial to partner with a provider offering comprehensive compliance solutions.
Streamline BOI Reporting With Harbor Compliance's Software and Filing Support
When it comes to BOI reporting, selecting the right service provider is crucial, whether you opt for dedicated BOI reporting software or comprehensive compliance solutions. Harbor Compliance excels in this area and has a proven track record in regulatory management.
We provide advanced software called Records Manager, designed to securely collect and store data from beneficial owners and company applicants. This tool, which is sold separately with our proprietary Software Suite, ensures your entity's BOI is safely and effectively stored and managed.
We also offer a comprehensive BOI Reporting Service, allowing you to delegate BOI reporting to us—we will file your reports with FinCEN on your company's behalf. This combination of software and reporting ensures a streamlined reporting process.
Benefits of Partnering With Harbor Compliance for Beneficial Ownership Information Reporting (BOIR)
When partnering with Harbor Compliance for BOI reporting needs, you can choose our Records Manager software, BOI filing services, or a combination of both. Regardless of the option you select, you'll benefit from:
- Secured data storage—The Records Manager ensures that all beneficial ownership and leadership information is securely stored and protected from data breaches.
- Automated reminders—The software sends timely reminders to keep your company records up-to-date. Also, if you opt for the BOI filing service, you'll receive periodic reminders to file an updated or corrected BOI report.
- Peace of mind—You'll gain confidence knowing your reporting is handled by professionals experienced in regulatory landscapes.
- Streamlined processes—By opting for our services, you benefit from streamlined processes that reduce the administrative burden of managing BOI reporting.
The Process of Ordering Harbor Compliance BOI Reporting Service
Harbor Compliance's BOI Reporting Service is specifically designed to streamline BOI filing for your entity. This service allows you to file your initial and up to four updated and corrected BOI reports in a year at a base annual fee. We classify entities who opt for these services into two categories:
- Single entities, such as a corporation, LLC, non-tax-exempt nonprofits
- Multiple entities, such as parent companies with various subsidiaries
To order our BOI Reporting Service, follow these steps:
- Visit Harbor Compliance's service ordering wizard and select your entity type (single or multiple).
- Provide the required information, such as your company name and contact information.
- Double-check the information provided.
- Submit the online form.
Harbor Compliance's Additional Services
In addition to specialized BOI reporting, Harbor Compliance offers a full suite of solutions to meet various regulatory demands. The table below outlines the different categories and services we offer:
| Category | Services |
|---|---|
| Nonprofit formation | We assist nonprofits in filing the necessary documents for incorporation and 501(c) tax exemption. |
| Registered agent service | We have offices across the U.S., which allows us to serve as your entity's registered agent nationwide. You can also use our service to change your registered agent if you're not satisfied with the current one. |
| Tax registration | We help businesses obtain their Employer Identification Number (EIN) and manage their sales and use tax registrations. We also assist entities in managing payroll tax accounts. |
| Entity lifecycle management | We cater to different stages of an entity's lifecycle, from filing for LLC formation, amendment, foreign qualification, and name reservation to eventual dissolution and withdrawal. We also manage Doing Business As (DBA) requirements and assist entities who wish to be reinstated. |
| Business licensing support | We help organizations file and secure the general business licenses needed to operate in the U.S., as well as industry-specific ones (construction, engineering, and more). |
| Document filing and retrieval | Our drop-off filing services enable us to submit documents directly to the secretary of state and similar offices. We help entities file initial and annual reports and assist them in securing their certified copies and certificates of good standing. |
BOI Reporting Software FAQs
In this section, we'll answer common questions readers have about BOI reporting software. To learn more, visit Harbor Compliance's information center.
Before choosing any BOI reporting software, consider key features like data collection and management, security protocols, and ease of use. Also, consider the software's ability to handle BOI updates and corrections.
A good BOI reporting software safeguards your sensitive personally identifiable information (PII) by implementing advanced security measures like encryption, access control, and secure data storage.
Yes. A good BOI reporting software should be able to handle iterations of your reports so you can easily modify and submit updated and corrected BOI reports.
Partnering With Harbor Compliance for Comprehensive Compliance Solutions
BOI reporting under the CTA is an ongoing obligation, not a one-time filing. As such, entities are required to submit updated and corrected reports as changes occur. Partnering with Harbor Compliance can streamline your BOI reporting process and help you adhere to the CTA.
Beyond BOI reporting, we offer solutions, such as registered agent services and annual report filing, to support your organization's needs.
To get started, use our free Harbor Compliance Score™ to assess your standing with regulatory requirements and note areas for improvement. You can book a demo session of our software to see our solutions in action and then order our BOI Reporting Service or other solutions you need so we can manage these tasks on your behalf.
