New Federal Reporting Requirement for Beneficial Ownership Information
In 2021, Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.
Who has to report? Your company may need to report information about its beneficial owners if it is:
- a corporation, a limited liability company, 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 filing.
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 companies. Even if your business is not specifically exempt, if it does not meet the definition of a reporting company listed above, then you do not have to report. For example, if you’re a sole proprietor this does not apply to you.
How do I report? Companies that are required to report beneficial ownership information report 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 do I report? FinCEN began accepting reports on January 1, 2024. If your company was created or registered prior to January 1, 2024 you have until January 1, 2025 to report your information.
You can find guidance and additional information at www.fincen.gov/boi.