March 21, 2025 update: The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury, issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
As a result, all entities created in the United States and their beneficial owners will be exempt from the requirement to report BOI to FinCEN.
Feb 27, 2025 update: The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury, announced it will not punish companies that do not submit Beneficial Ownership Information (BOI) reports by their previous March 21 deadline. Companies can still choose to file these reports voluntarily. We recommend that companies continue to take no action and wait for an official ruling to better understand how to follow the Corporate Transparency Act.
Dec 26, 2024 update: The Corporate Transparency Act has again been blocked by a nationwide injunction. Employers are instructed to take no action until further notice.
Dec 23, 2024 update: Enactment of the Corporate Transparency Act was paused in early December by a nationwide court injunction, but in late-breaking news, the federal court has reinstated this Act, now with a filing deadline of January 13, 2025 instead of the original January 1 deadline.
If you own or operate a business, you may need to take action to comply with the Corporate Transparency Act.
The Corporate Transparency Act, designed to increase transparency in the U.S. financial system, requires certain businesses to report information about their beneficial owners. You may need to provide information about your “beneficial owners.”
Who Does the Act Affect?
The Corporate Transparency Act primarily affects businesses formed or operating in the United States, such as corporations and LLCs. Get more information from this government resource.
However, the Act does not apply to all businesses. Publicly traded companies, banks, and credit unions are generally exempt from the reporting requirements. See the FAQs for a more complete list of exempt businesses.
The Act requires businesses to report information about their “beneficial owners” to the government.
Beneficial owners are the people who ultimately own or control a business, even if they aren’t listed as the official owners on paper. A beneficial owner could be the person who:
- Owns more than 25% of the company’s shares
- Has power to make decisions about the company’s finances or operations
- Controls the company through a nominee or intermediary, such as a trust
Action Required
See note at the beginning of this article. Entities created in the United States are now exempt from reporting. No action is required for those companies at this time.
Originally, the deadlines were as follows: By January 13, 2025, businesses covered under the Act must file their beneficial ownership information report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. Businesses formed prior to January 1, 2024 have until January 13, 2025 to do so, and businesses formed after January 1, 2024 need to begin doing so within 30 days of registration.
The government wants to make it harder for criminals to use businesses to hide their activities, such as money laundering or tax evasion. By knowing who the real owners are, they can better track and prevent these crimes.
Failure to comply could lead to serious consequences, including fines of up to $10,000 per violation. In some cases, non-compliance could even lead to criminal charges, including imprisonment for up to two years.
How to File a Beneficial Ownership Information Report
- Obtain a FinCEN ID: If you do not have a unique identifier from the Financial Crimes Enforcement Network (FinCEN) you can request one when you submit your report. You can also obtain a FinCEN ID through the FinCEN website.
- Gather Required Information: Collect basic demographic information about your beneficial owners, such as full legal name, address, and date of birth. Documents will need to be uploaded with the report, such as driver’s license, passport, or other ID. If the ID expires within a few months, new documentation will need to be uploaded.
- File the Report: You can file your report electronically through the FinCEN’s online portal at fincen.gov/boi. Remember to file on or before January 1, 2025.
- Upkeep: Clients will need to regularly update the report with any Beneficial Ownership changes. (Names, addresses, document expiration).
Additional Resources
For more detailed information and guidance on the Corporate Transparency Act and beneficial ownership reporting, please refer to the following resources:
Disclaimer: This article provides a general overview of the Corporate Transparency Act and is not legal advice. Please consult with legal professionals to ensure compliance with all applicable regulations and to address specific questions related to your business.
