There has been widespread pushback against the new beneficial ownership information ( BOI ) reporting requirements – but whether we like it or not , this new rule is here , and the U . S . Department of Treasury ’ s Financial Crimes Enforcement Network ( FinCEN ) is officially accepting BOI reports . The Corporate Transparency Act ( CTA ), which introduced these new reporting requirements , became law effective Jan . 1 , 2021 , as part of the National Defense Authorization Act to combat money laundering , terrorism financing and other criminal funding activities from occurring in the United States .
Beginning Jan . 1 , 2024 , the CTA implements BOI reporting requirements for corporations , limited liability companies and other business entities formally created in or registered to do business in the United States . Under the CTA , the identity and other confidential information about the “ beneficial owners ” of these entities must be disclosed to FinCEN .
Common FAQs
Below are a few FAQs related to the CTA , including who is required to comply , what information is required and more .
Who is required to comply ? A reporting company is any domestic or foreign corporation , limited liability company or similar entity with less than 20 employees and $ 5 million in annual gross revenue / receipts that was either :
• Created by the filing of a document with the secretary of state or a similar office under the laws of a State or Indian Tribe ; or
• Formed under the laws of a foreign country and registered to do business in the United States by the filing of a document with a secretary of state or a similar office under the laws of a State or Indian Tribe .
Some entities , such as banks , credit unions , investment advisors , brokers / dealers , insurance companies and charitable organizations are exempt from the BOI reporting requirements . It is important to note , entities exempt from reporting may still own a reporting company in its structure , and therefore , may be a beneficial owner required to file a BOI report for the underlying reporting company .
FinCEN has published a Small Entity Compliance Guide intended to help businesses determine if they are required to report its BOI to FinCEN , which includes a full listing of exempt entities .
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Scan the code to download the Small Entity Compliance Guide today .
What company information should be reported ? If a reporting company is created or registered on or after Jan . 1 , 2024 , it is required to report information about itself , its beneficial owners and company applicants . Reporting companies created or registered before Jan . 1 , 2024 , will only need to provide information about itself and beneficial owners .
Reporting companies must report the following information :
• The company ’ s legal name
• Any trade names
• Current street address of its principal place of business
• Jurisdiction of formation or registration
• Taxpayer identification number
Who is considered a beneficial owner and what information is required ? Beneficial owners are any individuals who own or control at least 25 % of the entity , directly or indirectly , or who have substantial control over the entity . Required information to be submitted about each beneficial owner ( and applicants , if applicable ) includes :
• Full legal name
• Address
• Date of birth
• Form of unique identification number , such as a U . S . driver ’ s license or passport number
• A digital image of the identification document
All information will be placed on a confidential registry maintained by FinCEN .
VIEWPOINTS : ISSUE 1 2024 | 03