Congress passed the Corporate Transparency Act (CTA) in 2021 which created beneficial ownership information (BOI) reporting requirements that will start on January 1, 2024. On that date, many companies in the United States will have to comply with the CTA and report details about their beneficial owners, the people who ultimately own or control the company, to the Financial Crimes Enforcement Network (FinCEN). The following overview is intended to provide general information so that you may be aware of these new reporting requirements. We recommend that you consult legal counsel with any questions as to the applicability of these reporting requirements to your situation if not otherwise found on the BOI webpage or in the related FAQs.
A company may be considered a reporting company that needs to report information related to beneficial owners if the company 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.
However, there are BOI reporting exemptions for certain types of entities, including publicly-traded companies meeting specified requirements, many nonprofits, and certain large operating companies (generally companies with a U.S. office; greater than $5M gross revenues; and 20 or more employees). FinCEN provides a list of 23 types of entities that are exempt from BOI reporting within these categories in its BOI Small Entity Compliance Guide.
Reporting companies will have to report beneficial ownership information online through FinCEN’s website. Companies cannot begin reporting until on or after January 1, 2024, since FinCEN is not yet accepting reports.
Under current rules if a company existed or was registered before January 1, 2024, it has until January 1, 2025, to report. If it was created or registered on or after January 1, 2024 and before January 1, 2025, it will report within 90 days after the company’s creation or registration is effective. If a company was created or registered on or after January 1, 2025, it must file within 30 calendar days. Any updates or corrections to previously reported beneficial ownership information must be submitted within 30 days.
The information required of the reporting company includes the full legal name, any trade name or “doing business as” (DBA) name, current US address, state, tribal, or foreign jurisdiction of formation, and Taxpayer Identification Number (TIN).
Each beneficial owner and company applicant will need to provide their full legal name, date of birth, current address, unique identifying number and copy of one of the following non-expired documents:
- U.S. Passport
- State driver’s license
- Identification document issued by a state, local government, or tribe
- If an individual does not have any of the previous documents, foreign passport
For additional detailed information related to the CTA/BOI, as well as a listing of FinCEN FAQs, you can visit www.fincen.gov/boi.