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| The Corporate Transparency Act took effect Jan. 1, 2024, requiring non-exempt U.S. entities and non-exempt foreign entities registered to do business in the United States (collectively, Reporting Companies) to submit beneficial ownership information. (BOI) reports to a confidential FinCEN database. BOI reports must include certain personal information about individuals who, directly or indirectly, (1) exercise substantial control over the Reporting Company, or (2) own or control at least 25% of the ownership interests of the Reporting Company. The fact that one entity within a corporate structure qualifies for an exemption to reporting does not necessarily mean that other entities within that structure will also be exempt. Reporting Companies created or registered during the 2024 calendar year will have 90 days to file an initial BOI report. Reporting Companies created or registered before Jan. 1, 2024, will have until Jan. 1, 2025, to submit BOI reports to FinCEN. |
Starting Jan. 1, 2024, the Corporate Transparency Act and its implementing regulations mandate that certain U.S. legal entities and foreign entities registered to do business in the United States (collectively, Reporting Companies) report certain BOI to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). According to FinCEN, this reporting requirement is intended to enhance the ability of FinCEN and other agencies to protect the U.S. financial system from illicit use, bringing the United States in line with at least 30 other countries that have implemented some form of central register of BOI.
Which Entities Must Report BOI?
The following entities fall within the scope of the CTA and must report BOI to FinCEN, unless exempt:
- Domestic Reporting Companies: Any corporation, limited liability company (LLC), or other similar entity created by the filing of a document with a secretary of state or similar office of a state or Indian tribe.
- Foreign Reporting Companies: Any corporation, LLC, or other entity formed under the laws of a foreign country registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office.