Effective January 01, 2024
Affects All United States Businesses (some exceptions apply)
Overview
Congress passed the Corporate Transparency Act in 2021 to combat financial crimes such as money laundering, hiding of assets, and tax fraud. Among the provisions, businesses must report their business information as well as the Beneficial Ownership Information (BOI) of owners, officers, and applicants of new businesses to the Financial Crimes Enforcement Network (FinCEN).
What Businesses Must Report?
Corporations, LLCs, or any business created in the United States by filing with the Secretary of State or similar office known as a Domestic Reporting Company, or corporations, LLCs, or any business created under the laws of a foreign country that register to do business in the United States by filing with the Secretary of State or similar office known as a Foreign Reporting Company. Businesses already required to file or register with a United States agency are exempt for this requirement. The following is a list of those exempt entities (Source FinCEN), however, it is advisable to partner with an attorney to confirm if your business is exempt.
What Is the Definition of a Beneficial Owner?
FinCEN defines a beneficial owner as an individual that either directly or indirectly exercises substantial control over the reporting company OR owns or controls at least 25% of the reporting company’s ownership interests.
What Is the Definition of a Business Applicant?
FinCEN defines a business applicant as the individual who directly files the document that creates or registers the company AND the individual who is primarily responsible for directing or controlling the filing.
Reporting Deadlines and What Must Be Reported
Businesses Created PRIOR to January 01, 2024
Deadline: January 01, 2025; may report beginning January 01, 2024
Must Report the Following:
Business Information
- Legal name
- Any trade names (dba or ta)
- Current United States address
- Jurisdiction of formation or registration; and
- Taxpayer identification number
Beneficial Owner Information
- Name
- Date of birth
- Residential address
- An identifying number and issuing state or jurisdiction from an acceptable ID (Unexpired driver license, passport, ID issued by a U.S. state or local government, or Indian Tribe, foreign passport if the individual does not have one of the previous three forms of ID)
Business Applicant Information
- Information regarding the business applicant is not required for businesses created PRIOR to January 01, 2024
Businesses Created ON OR AFTER January 01, 2024 – December 31, 2024
Deadline: within 90 calendar days after receiving notice the creation or registration is effective (New Rule Effective 11/29/2023)
Must Report the Following:
Business Information
- Legal name
- Any trade names (dba or ta)
- Current United States address
- Jurisdiction of formation or registration; and
- Taxpayer identification number
Beneficial Owner Information
- Name
- Date of birth
- Residential address
- An identifying number and issuing state or jurisdiction from an acceptable ID (Unexpired driver license, passport, ID issued by a U.S. state or local government, or Indian Tribe, foreign passport if the individual does not have one of the previous three forms of ID)
Business Applicant Information
- Name
- Date of birth
- Address
- An identifying number and issuing state or jurisdiction from an acceptable ID (Unexpired driver license, passport, ID issued by a U.S. state or local government, or Indian Tribe, foreign passport if the individual does not have one of the previous three forms of ID)
Businesses Created ON OR AFTER January 01, 2025
Deadline: within 30 calendar days after receiving notice the creation or registration is effective (New Rule Effective 11/29/2023)
Must Report the Following:
Business Information
- Legal name
- Any trade names (dba or ta)
- Current United States address
- Jurisdiction of formation or registration; and
- Taxpayer identification number
Beneficial Owner Information
- Name
- Date of birth
- Residential address
- An identifying number and issuing state or jurisdiction from an acceptable ID (Unexpired driver license, passport, ID issued by a U.S. state or local government, or Indian Tribe, foreign passport if the individual does not have one of the previous three forms of ID)
Business Applicant Information
- Name
- Date of birth
- Address
- An identifying number and issuing state or jurisdiction from an acceptable ID (Unexpired driver license, passport, ID issued by a U.S. state or local government, or Indian Tribe, foreign passport if the individual does not have one of the previous three forms of ID)
After Initial Reporting to FinCEN
Once you have reported the required information for your business(es) you are not required to report periodically on a go forward basis. However, all businesses must report any changes or corrections within 30-days. For example, if it is discovered that incorrect information was provided on the initial reporting, the business has 30-days to report correction(s). Additionally, anytime there is a change in business or beneficial owner information, such as a name or address change, that too must be reported within 30 days.
For further details or to report your business information online beginning 01/01/2024 please visit the FinCEN website.