In a bid to enhance financial transparency and thwart illicit financial activities, Congress passed the Corporate Transparency Act in 2021. This pivotal legislation introduces a beneficial ownership information reporting requirement, compelling U.S. companies to disclose details about their owners and individuals who exercise substantial control over a reporting company. 

As the new reporting era kicks off on January 1, 2024, we are here to guide you through the process and ensure compliance with these significant regulatory changes.

Understanding Beneficial Ownership Information (BOI) Reporting:

The Corporate Transparency Act mandates that reporting companies provide information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. This move is a strategic effort to dismantle the use of shell companies and obscure ownership structures by individuals with nefarious intentions.

Who Needs to Report?

If your company is a corporation, a limited liability company (LLC), or is an entity created by filing a document with a secretary of state, or similar office, you may be required to report beneficial ownership information. Foreign companies registered to do business in the U.S. also fall under this reporting requirement. 

However, there are exemptions for certain entities, including publicly traded companies, nonprofits, and specific large operating companies. To determine eligibility for an exemption, refer to FinCEN’s Small Entity Compliance Guide.

How to Report:

Reporting companies must submit their beneficial ownership information electronically through FinCEN’s website at www.fincen.gov/boi. The system will issue a confirmation of receipt once the report is successfully filed, streamlining the reporting process for your convenience.

Reporting Timeline:

The reporting timeline is critical for compliance. Companies created or registered before January 1, 2024, have until January 1, 2025, to submit their reports.

For those created or registered on or after January 1, 2024, and before January 1, 2025, reporting must occur within 90 calendar days of receiving notice of the company’s creation or registration. 

Meanwhile, companies created or registered on or after January 1, 2025, must file within 30 calendar days after receiving notice.

Updates and Corrections:

In the dynamic business environment, updates or corrections to previously filed beneficial ownership information are inevitable. Reporting companies must promptly submit any modifications to FinCEN within 30 days of identifying the need for an update.

As the Corporate Transparency Act comes into effect, it is imperative for businesses to embrace the era of enhanced financial transparency. We are committed to supporting you through this transition, ensuring compliance with the beneficial ownership information reporting requirements, and fostering a culture of integrity and accountability. 

For further details, please contact our team or refer to FinCEN’s Small Entity Compliance Guide for comprehensive information on exemptions and reporting procedures.