iWHY DO COMPANIES HAVE TO REPORT BENEFICIAL OWNERSHIP INFORMATION TO THE U.S. DEPARTMENT OF THE TREASURY?
In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information (“BOI”) reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
WHEN WILL THE CTA GO INTO EFFECT?
The CTA becomes effective on January 1, 2024.
CAN I GET AHEAD AND SUBMIT MY INFORMATION NOW?
No, FinCEN is not accepting submissions until January 1, 2024.
HOW MUCH WILL THIS COST?
FinCEN is not charging a fee to submit these reports.
WHAT FILING TIMELINE DO I NEED TO BE WORRIED ABOUT?
When was your company formed?
- Prior to 01/01/24 means you have one year to comply with the filing requirements, before 01/01/25
- Between 01/01/24 and 01/01/25 means you must file within 30 calendar days of formation. (FinCEN issued a recent notice stating they may change the 30-day requirement to 90 days. This time frame remains uncertain as of publication of this FAQ.)
- After 01/01/25 you have 30 calendar days to file.
WHAT IF I MAKE CHANGES AFTER FILING?
If there are any changes to the information about your company or its beneficial owners in the BOI report that your company filed, your company must file an updated BOI report within 30 days of the date on which the change occurred.
NOTE: The changes include information submitted by you to obtain a FinCEN identifier which allows someone to file the BOI on behalf of a regulated entity.
WHAT IF I MAKE A MISTAKE IN MY FILING?
Your company must correct any mistake or inaccuracy in information no later than 30 days after your company has detected the incorrect information or should have known of the error or inaccuracy.
IS THIS AN ANNUAL FILING?
No. The final rule imposes a rolling obligation on reporting companies to update information as it changes or becomes inaccurate. An annual filing is not appropriate as a standard for CTA compliance.
WHAT EXACTLY IS BOI?
BOI includes information about the individuals who hold significant control over a business. It encompasses data such as the individual’s name, date of birth, address, and government-issued identification. Both domestic and foreign entities registered with any secretary of state or formed under the laws of any state are mandated to report their BOI to FinCEN.
CAN A NON-US ENTITY BE CONSIDERED A REPORTING COMPANY?
Yes. It is important to note that non-US entities will fall under the definition of a Reporting Company if they are registered to do business with a US secretary of state (or a similar office).
WHAT IS A FINCEN IDENTIFIER AND HOW CAN I GET ONE?
A “FinCEN identifier” is a unique identifying number that FinCEN will issue to individuals upon request after the individual provides information such as their name, date of birth, address, unique identifying number and an acceptable government issued identification document. A reporting company may also request a FinCEN identifier by checking the required box on the reporting form
CAN FINCEN SHARE THIS INFORMATION?
Yes, in limited circumstances. Given the sensitivity of the reportable information, the CTA imposes strict confidentiality, security, and access restrictions on the data. However, FinCEN is authorized to disclose reportable beneficial owner information to a defined group of governmental authorities and financial institutions, in limited circumstances.
FinCEN’s website: www.fincen.gov
