BOI Reporting Requirements

In 2021 the Corporate Transparency Act (“CTA”) was enacted by Congress as part of the National Defense Authorization Act. Under the CTA, certain businesses must report to the Financial Crimes Enforcement Network (“FinCEN”), a division of the U.S. Department of the Treasury, the identity of the individual(s) who actually owns and/or controls these businesses.  The purpose of the CTA is to prevent shell companies used in connection with terrorism, money laundering, tax evasion, etc.  The information provided to FinCEN under the CTA is not publicly available.  

Except for companies that qualify for an exemption, the “Reporting Companies” include U.S. corporations, U.S. limited liability companies, all other U.S. companies that were created by the filing of a document with the secretary of state (or similar office), and all other companies created under the laws of a foreign country and which have registered to do business in any U.S. state or tribal jurisdiction by filing a document with a secretary of state (or similar office).  The exemptions include publicly traded companies meeting specified requirements, many non-profits, and certain large operating companies. 

Each Reporting Company must provide personal information to the FinCEN for “Beneficial Owners,” i.e., individuals who either directly or indirectly exercise “substantial control” over the Reporting Company or who owns or controls at least 25% of the Reporting Company’s ownership interests.  In addition, Reporting Companies must provide personal information to the FinCEN for “Company Applicants,” i.e., individuals who directly filed the document that created the Reporting Company (or in the case of a foreign Reporting Company, the document that first registers the Reporting Company to do business in the U.S.), and if different, the induvial primarily responsible for directing or controlling the filing of the relevant document by another. 

Beneficial Owners and Company Applicants must provide their full legal name, date of birth, and complete current residential address.  They must also provide the unique identifying number and issuing jurisdiction from, and an image of, their U.S. passport, state driver’s license, or identification document issued by a state, local government or tribe, or if the individual does not have any of these documents, a foreign passport.  Further, for Company Applicants who form or register a company in the course of their business duties, the company’s business address is a sufficient substitution for their residential address. 

Reporting Companies created or registered to do business before January 1, 2024, have until January 1, 2025 to file their initial BOI reports. Reporting Companies created or registered on or after January 1, 2024, and before January 1, 2025, have ninety (90) calendar days after receiving actual or public notice that their company’s creation or registration is effective to file their initial BOI reports. Reporting Companies created or registered on or after January 1, 2025, will have thirty (30) calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports. 

Reporting Companies must submit an updated report within thirty (30) days of any ownership change of the company, and/or thirty (30) days after a Reporting Company becomes or has reason to know of an inaccuracy of the currently reported information.  Penalties for not timely filing may include civil penalty of up to $500 per day, and/or criminal penalties of prison for up to two (2) years and up to $10,000 fine.  

Additional information about the reporting requirements and guidance materials are available at www.fincen.gov/boi. FinCEN has issued and will continue to issue frequently asked questions to address specific questions on the topic. They can be found at www.fincen.gov/boi-faqs.  

Please contact us if you have any questions or need any assistance regarding the CTA and the BOI reporting requirements.  We’re here to help.