All About Beneficial Ownership Information

The upcoming implementation of the Corporate Transparency Act mandates the reporting of beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of Treasury. But what is beneficial ownership and what specific information will be required to be reported? Let's take a look at the details.

What is beneficial ownership?

FinCEN defines a beneficial owner as “any individual who exercises substantial control over your company, or who owns or controls at least 25 percent of your company.”

What information will be required on the Beneficial Ownership Information (BOI) Report?

• The company’s legal name and any trade name or DBA;
• Company address;
• The jurisdiction where it was formed or registered, whether it’s a U.S. or foreign company; and
• Taxpayer identification number.

The company's beneficial owners and each company applicant (if it is an LLC or corporation formed in 2024 or later) are required to provide the following personal details:

• Legal name;
• Birthday;
• Address (typically a home address);
• An identifying number from a driver's license, passport, or other approved document for each individual, including an image of the document that number is from.

Who is required to file a BOI Report?

Every corporation and LLC in the United States will be required to submit a BOI Report unless they meet the criteria for an exception.

Most notably, companies that meet all three of the following criteria are not required to file a BOI Report:

• The company employs more than 20 people;
• The company reports more than $5 million in gross receipts; and
• Company has a physical presence in a business office in the United States.

Other exceptions include publicly traded companies and other entities that file reports with the SEC, banks, credit unions, money services businesses, securities brokers and dealers, tax-exempt entities, insurance companies, state-licensed insurance producers, pooled investment vehicles, public utilities, and accounting firms.

When are BOI Reports required to be submitted?

If your company was established or officially registered prior to January 1, 2024, you must submit your filing with FinCEN by January 1, 2025.

Any company formed on or after January 1, 2024 is required to submit a BOI Report to FinCEN within 30 days of receiving the formation or incorporation paperwork from the secretary of state or similar state office that originally created or registered the company.

How will BOI Reports be submitted?

Filing will take place electronically through a secure filing system via FinCEN’s website. FinCEN anticipates that the platform will be available starting January 1, 2024.

I have more questions.

We understand! This is a significant change to the requirements of many of our clients. We have added a CTA FAQ page if you'd like to learn more and we will keep it updated as new information is announced. We'd also encourage you to take a look at the BOI Small Entity Compliance Guide recently released by FinCEN.