Reminder on Beneficial Ownership Reporting

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Fact Sheet on Beneficial Ownership Reporting

The Corporate Transparency Act of 2021 requires corporations, LLCs, and other entities formed under state law (domestic reporting companies) or similar entities formed under foreign law and registered to do business in the U.S. (foreign reporting companies) to report their beneficial ownership to FinCEN — the Financial Crimes Enforcement Network. We are reminding you about filing a beneficial ownership report in order to help you file reports as the date gets closer.

Beneficial Ownership Reporting Specifics

WHY?

The reason is to deter kleptocrats, human rights abusers and other corrupt actors from hiding and laundering for corrupt activities. These illegal actors use complex and opaque corporate structures, including shell companies.

WHEN?

Reports can be submitted starting Jan. 1, 2024 (not before). Disclosure is required for a beneficial owner, who is any individual who directly or indirectly exercises “substantial control” over the reporting company, or who directly or indirectly owns or controls 25% or more of the “ownership interests” of the reporting company. Failure to do so can result in civil or criminal penalties.

Reporting companies created or registered in the U.S. before January 1, 2024, will have one year — until January 1, 2025 — to file their initial BOI reports. Companies created or registered after January 1, 2024, will have 30 days after creation or registration to file.

HOW?

FinCEN is requesting a BOI (Beneficial Ownership Information) report. This will provide the name, birthdate, and address for each of the reporting company’s beneficial owners. Businesses will also need to provide a unique identifying number from an identification document acceptable to FinCEN for each beneficial owner. An image of that document must also be included.

Once they’ve filed an initial report, both existing and new reporting companies will be required to provide updates of any changes in ownership information within 30 days of the change.

How to report is still unspecified and FinCEN is to publish more details closer to the deadline. The agency also will be publishing a “Small Entity Compliance Guide” that will inform smaller companies and other entities required to file reports.

WHAT TO REPORT?

The following items need to be included in the beneficial ownership report:

• The business’s legal name and any trade names or “doing business as” (DBA) names
• The current street address of its principal place of business in the U.S.
• Its jurisdiction of formation or registration
• Its taxpayer identification number
• The name, date of birth, and address of all beneficial owners of the company
• A unique identifying number from an acceptable identification document (driver’s license issued by a U.S. state or passport)

The company must also submit an image of the identification document to FinCEN.