Guide to Beneficial Ownership Information Reporting

Update: On December 3, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting the enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. In light of the injunction, the Financial Crimes Enforcement Network (FinCEN), which oversees the implementation of the CTA, has announced that businesses are not required to submit BOI reports by the January 1, 2025, deadline as long as the injunction remains in place. However, FinCEN has clarified that businesses may voluntarily submit BOI reports, though compliance is optional under the current legal framework. For the latest updates on this new requirement, please check the links in the resources at the bottom of this blog.

Starting January 1, 2024, many U.S. businesses are required to report information about their beneficial owners, i.e., the individuals who own or control the company. Businesses must report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau. The reporting, a requirement of the Corporate Transparency Act (CTA), aims to combat financial crime and corruption and must be completed by January 1, 2025.

Businesses could face criminal and civil penalties if they do not follow BOI reporting obligations.

What is a Reporting Company?

The CTA applies to a range of entities formed or registered to do business in the U.S., including:

• Corporations
• Limited Liability Companies (LLCs)
• Limited Partnerships
• Certain trusts

Who is a Beneficial Owner?

A beneficial owner is anyone who controls or owns 25% or more of a reporting company, either directly or through a series of other entities. This can include individuals, trusts, or other companies.

What Information Needs to be Reported?

For each beneficial owner, a business will need to report:

• Full legal name
• Date of birth
• Current residential address
• Unique identifying number and issuing jurisdiction from a government-issued I.D. (e.g., passport, driver’s license)
• Image of the document containing the identifying number
• The report must include information about the reporting company itself, such as its legal name, business address, and federal tax I.D. number.

When Do You Need to File?

• Existing Businesses (formed or registered before January 1, 2024):
  • Must file an initial report by January 1, 2025.
• New Businesses (formed or registered on/after January 1, 2024):
  • If created/registered in 2024: within 90 days of receiving notice of creation or registration.
  • If created/registered on or after January 1, 2025: within 30 days of receiving notice of creation or registration.

How Do You File?

To file, visit FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov) and select “File BOIR.” Filing is free.

Resources:

• FinCEN’s CTA webpage: https://www.fincen.gov/sites/default/files/shared/Corporate_Transparency_Act.pdf
• FinCEN’s BOI Reporting Rule: https://www.fincen.gov/boi
• FinCEN’s BOI Frequently Asked Questions: https://www.fincen.gov/boi-faqs

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Please consult with an attorney familiar with the CTA and its regulations for specific guidance.