5 minute read
Understanding BOI Filings for Dental Practices: What Dentists Need to Know
Victoria S. Brokaw
As a North Carolina dentist, you are likely accustomed to navigating various regulatory requirements that impact your practice, from licensing and insurance to patient care standards. However, a relatively new requirement that may have flown under the radar is the Beneficial Ownership Information (BOI) filing, which has significant implications for dental practices and their owners. Most dental practices will not fit an exemption to filing as most exemptions are related to financial services businesses, that have other licensure and registration.
WHAT IS A BOI FILING?
The Beneficial Ownership Information (BOI) filing is part of the Corporate Transparency Act (CTA) which was enacted as part of the National Defense Authorization Act (NDAA) in January 2021. The CTA mandates that certain entities, including corporations, limited liability companies (LLCs), and similar structures, file information with the Financial Crimes Enforcement Network (FinCEN) about their beneficial owners. A beneficial owner is defined as a person who directly or indirectly owns or controls at least 25% of a business entity or has significant control over the entity’s operations.
The goal of this law is to combat money laundering, terrorist financing, and other illicit activities by increasing transparency in corporate ownership. The BOI filings will help the U.S. government identify the individuals behind the businesses and their financial activities.
Practices that operate as corporations or LLCs in North Carolina (or anywhere in the U.S.) must comply with the BOI filing requirements. The BOI filing applies to all entities formed or registered to do business in the U.S., including:
· S-Corporations
· C-Corporations
· Limited Liability Companies (LLCs)
· Limited Partnerships (LPs)
If your dental practice operates under any of these structures, you may need to file beneficial ownership information with FinCEN, depending on the circumstances.
Exemptions From Boi Filing Requirements
Not all entities are required to file BOI information. There are several exemptions, including:
Large operating companies: Entities with more than 20 employees, over $5 million in annual revenue, and a physical office in the U.S.
Regulated entities: Businesses already regulated by federal or state agencies, such as banks, credit unions, and registered investment advisors.
However, most similar privately held dental practices will not qualify for these exemptions and will therefore need to submit a BOI filing.
WHAT INFORMATION MUST BE FILED?
If your dental practice is required to file, you will need to provide detailed information about the beneficial owners of the business. The filing must include:
Full legal name of the beneficial owner
Date of birth
Residential address (or business address for owners with no personal residence)
A unique identifying number from an official identification document, such as a passport or driver’s license
A statement of ownership or control over the dental practice
This information will be securely stored by FinCEN, and the filings will be accessible to authorized parties such as a law enforcement, regulators, and financial institutions as needed.
Deadlines For Filing Boi Information
The BOI filing deadline varies based on the type of business entity:
For new entities: Dental practices formed after January 1, 2024, must file their BOI Information with FinCEN within 30 days of formation and registration.
For existing entities: Dental practices formed before January 1, 2024, must submit their BOI information to FinCEN by January 1, 2025.
Once submitted, the information must be updated annually or whenever there is a significant change in ownership or control.
PENALTIES FOR NON-COMPLIANCE
Failure to comply with the BOI filing requirements can result in severe penalties. Businesses that fail to file, knowingly provide false information, or fail to update their filings as required could face penalties of up to $500 per day for non-compliance. In extreme cases, criminal penalties could be imposed, including fines up to $10,000 or even imprisonment for willful violations.
As a dental practice owner, the consequences of non-compliance are too significant to ignore. Keeping your BOI information up to date is crucial to avoid penalties and ensure your practice remains in good standing with regulatory authorities.
HOW CAN YOU COMPLY WITH BOI FILINGS?
1. Consult with Your Attorney or Accountant: Given the legal complexities involved, it is wise to consult with your attorney or accountant to understand your specific filing obligations. This will ensure that your practice meets all the necessary requirements and avoids penalties.
2. Prepare Your Information: Start gathering the required information for each beneficial owner. If you are the sole owner of your practice, this will be straightforward, but for partnerships or practices with multiple owners, make sure that each owner’s details are collected.
3. File with FinCEN: Once your information is gathered, you or your legal representative can file the required documentation with FinCEN. Ensure the filing is accurate and completed on time to avoid any fines or legal issues.
Conclusion
The BOI filing requirement is an important regulatory development that affects dental practices in North Carolina. By understanding the new law and its implications, you can ensure that your practice stays compliant and avoids unnecessary penalties.
If you have any questions about whether your dental practice needs to file or how to navigate the process, it’s highly recommended to seek legal counsel. The Attorneys at Hull & Chandler, P.A. know the BOI filing requirements and can discuss with you whether your company needs to file. We can also discuss with you your business structure and discuss whether there may be a more efficient entity structure to use going forward. Feel free to contact Hull & Chandler to discuss your BOI filing requirements or other business needs.
Victoria S. Brokaw is an attorney at Hull & Chandler, P.A. Victoria’s practice focuses on helping public and privately-held clients with a wide range of transactional matters, including mergers & acquisitions, commercial contracts and corporate governance. She graduated magna cum laude and with Phi Beta Kappa membership from Elon University in 2015. In 2022, Victoria earned her J.D. from Vanderbilt Law School. Victoria is barred in North Carolina and South Carolina. (Hull & Chandler assisted in founding the nonprofit Carolinas Dental Advisors (CDA). The CDA helps to coordinate business resources for dental professionals.)
