December 21, 2023 • News

Beneficial Ownership Information Reporting Takes Effect January 2024

Beneficial Ownership Information Reporting Under the Corporate Transparency Act Takes Effect January 2024 Enacted in 2021, the Corporate Transparency Act (CTA) was created to identify illicit activity such as tax fraud, money laundering and financing for terrorism by capturing ownership information for specific businesses in the U.S. Effective January 1, 2024, businesses that meet certain criteria and are considered “reporting companies” must submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). 

How do you know if your business may be considered a reporting company?

• A business may be considered a “domestic reporting company” if:
  • it was created or formed under U.S. laws and:
    • is a corporation, or
    • is a limited liability company (LLC), or 
    • was created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian Tribe
• A business may be considered a “foreign reporting company” if it was created or formed under the laws of a foreign country and has registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or any similar office of a State or Tribe

Even if your business may be considered a reporting company, you may be exempt from reporting requirements if you fall under one of 23 exempt categories. For more information on reporting company qualifications as well as the list of exemptions, see the Small Entity Compliance Guide to BOI Reporting Requirements.

Who is a beneficial owner of a reporting company? Any individual who directly or indirectly exercises substantial control over the company, or owns or controls at least 25% of the ownership interests.

What information must the BOI include? Name, date of birth, residential address, identification number.

When is the BOI Report due?:

• Companies registered to do business before January 1, 2024, must submit their report between January 1, 2024-January 1, 2025.

• Companies created on or after January 1, 2024, must submit their BOI within 90 calendar days of notice of their effective registration.

• Failure to report, or providing false information, may result in civil or criminal penalties.

For more information about the BOI, see the FinCEN webpage: https://www.fincen.gov/boi