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WHAT IS THE BENEFICIAL OWNERSHIP REPORT

New Federal Law Reporting for LLCs and Corporations​

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What is the Corporate Transparency Act?

The Corporate Transparency Act (the “CTA” for short) is a new law that requires certain domestic and foreign entities, called “reporting companies,” including LLCs and corporations, to submit their beneficial ownership information (that is, the names, addresses, and other information about the company's beneficial owners) to FinCEN, a federal governmental entity.

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What companies are exempt from the CTA reporting requirements?

The CTA’s reporting requirements generally exempt highly regulated companies such as banks and insurance companies, public companies, broker/dealers, public utilities, certain tax-exempt entities, and significant operating companies.

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What information do I need to report?

Reporting companies must include basic information about the company, company applicants, and beneficial owners in their Beneficial Ownership Information Report. The full legal name, trade names and DBAs, current address, jurisdiction of formation or registration, and tax ID number (for example, the EIN) must be reported. For each company applicant or beneficial owner, the name, date of birth, address, identification number, and document image containing the identification number (such as a driver’s license or passport) must be reported.

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Who is a Company Applicant or a Beneficial Owner?

A “Company Applicant” is the individual who directly files the document that creates or registers the reporting company and is primarily responsible for directing or controlling the filing if more than one individual is involved. Only reporting companies created on or after January 1, 2024, must include information about their company applicants. A ‘‘Beneficial Owner’’ is an individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25 percent of the ownership interests of the reporting company.

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When do I need to file it?

The filing requirements are effective January 1, 2024. Reporting companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports. Reporting companies created or registered in the calendar year 2024 will have 90 days after creation or registration to file their initial reports. Reporting companies created or registered on or after January 1, 2025, will have 30 days after creation or registration to file their initial reports.

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Is this a one-time filing or annual filing requirement?

A reporting company must file a one-time initial report. There is no annual filing requirement; however, once the initial report has been filed, reporting companies must file updates or corrections within 30 days of a change in their previously reported information or correct incorrectly reported information.

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What penalties could apply if I fail to file on time?

Criminal and civil penalties could apply to anyone who willfully provides false or fraudulent beneficial ownership information, including a false or fraudulent identifying photograph or document, or fails to report complete or updated beneficial ownership information. Civil penalties can be up to $591 per day, and criminal penalties include a fine of up to $10,000, imprisonment for not more than 2 years, or both.

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Visit FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov) and select “File BOIR.”