Beneficial Ownership Information Reporting Begins Under the Corporate Transparency Act

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Starting January 1, 2024, many business entities in the U.S. will have to provide information about their beneficial owners, who are broadly defined as the people who have ultimate ownership or control over the company. The Beneficial Ownership Information Report was included in the Corporate Transparency Act that Congress passed in 2021. The information will be submitted to Financial Crimes Enforcement Network (FinCEN), a U.S. Treasury Department bureau.

Who must report?
Every company must assess whether they meet the reporting requirements or if they would qualify for one of the 23 entity-type exemptions. In general, reporting companies (those businesses required to report) include:

• A corporation, a limited liability company (LLC), or other similar entity that 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.

Companies should carefully review the qualifying criteria available in FinCen’s Small Entity Compliance Guide before concluding that they are exempt.

When will reporting begin?

• If your company was created or registered on or after January 1, 2024 and before January 1, 2025, 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. Starting in 2025, this reporting window is 30 days.
• If your company was created or registered prior to January 1, 2024, you have until January 1, 2025, to report BOI.
• Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

What are next steps?
Companies may take the following steps.

• Determine if you need to file within 90 days or have until December 31, 2024. This is based on your company’s creation/registration date.
• Discuss the reporting requirements with your legal advisors. The form includes information that is based on decisions that are primarily legal in nature to determine the filing responsibilities.
• If required to file, begin defining procedures on how your company will stay compliant with the continued reporting requirements when changes in the beneficial ownership information occur.

Refer to the FinCen website or the FinCEN FAQ page for detailed information.