Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury
Some Background
In 2021, Congress passed the Corporate Transparency Act (CTA). The law creates a new beneficial ownership information (BOI) reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from shell companies or other opaque ownership structures.
Who Has to Report?
Your company may need to report information about its beneficial owners if it is:
a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
In general, a beneficial owner is someone who owns or controls at least 25% of a company or has substantial control over the company.
Who Does Not Have to Report?
Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies. FinCEN’s Small Entity Compliance Guide includes checklists for each of the 23 exemptions that may help determine whether your company qualifies for an exemption.
How to Report?
Reporting companies report beneficial ownership information electronically through FinCEN’s website: www.fincen.gov/boi. The system provides a confirmation of receipt once a completed report is filed with FinCEN.
When to Report?
FinCEN began accepting reports on January 1, 2024.
If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025, to report BOI.
If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Useful Links