Get your Beneficial Ownership Information filed with confidence

The Corporate Transparency Act is a law that will require millions of the nation's smallest business entities to report beneficial owner information (BOI) to the Financial Crimes Enforcement Network (FinCEN) starting in 2024. (FinCEN is a bureau of the U.S. Department of the Treasury.)

The law was enacted because “illicit actors” often set up small LLCs and corporations as shell companies, or fronts, to hide the identities of owners who are engaged in money laundering, financing terrorism, and other illegal activities.

According to FinCEN, the term beneficial owner includes any individual who, directly or indirectly, either Exercises substantial control over a reporting company (meaning they can make important decisions for the company)or owns or controls at least 25 percent of the ownership interests

According to FinCEN, an individual can exercise substantial control over a reporting company in four different ways. If the individual falls into any of the categories below, the individual is exercising substantial control: The individual is a senior officer (the company's president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company. The individual is an important decision-maker for the reporting company. See Question D.3 for more information. The individual has any other form of substantial control over the reporting company as explained further in FinCEN's Small Entity Compliance Guide (see Chapter 2.1, “What is substantial control?”).

Businesses meeting these specific criteria must report information about their beneficial owners and those with substantial control: Have 20 or fewer full-time employees and less than $5 million in sales and Are LLCs, limited liability partnerships, corporations, business trusts, or other entities created by filing with a Secretary of State, tribal jurisdiction, or similar office Foreign LLCs and corporations that are registered to do business in any state or tribal jurisdiction You may be excluded from filing a Beneficial Owner Report if your company is one of the following. Securities reporting issuer Governmental authority Bank Credit union Depository institution holding company Money services business Broker or dealer in securities Securities exchange or clearing agency Other Exchange Act registered entity Investment company or investment adviser Venture capital fund adviser Insurance company State-licensed insurance producer Commodity Exchange Act registered firmPublic utilityFinancial market utilityPooled investment vehicleTax-exempt entityEntity assisting a tax-exempt entityLarge operating companySubsidiary of certain exempt entitiesInactive entity

The regulations went into effect on January 1, 2024. Companies that were created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports. Companies created or registered after January 1, 2024, will have 90 days after creation or registration to file their initial reports. If there's a change in beneficial owner information after the initial report is filed, a company will have to file an update within 30 days of the change.