Many are wondering what does all of this mean? Why have I never heard of this before? All of the abbreviations and terms related to this new Ruling are completely foreign to most business owners and they don’t know if it is real or what.. Unfortunately – it is real. not a scam. Most business owners need fo file a report this year or face extensive penalties or even imprisonment! OwnerFIling.com is here to help get your report filed for you or just answer any questions you have so you can decide how to proceed. Contact us anytime or Get Started

The Corporate Transparency Act (“CTA”) was enacted by Congress on January 1, 2021, as part of the National Defense Authorization Act. The CTA includes significant reforms to anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud.  The CTA establishes a beneficial ownership reporting requirement for corporations, limited liability companies, and other similar entities formed or registered to do business in the United States. Beneficial ownership reports must be filed with the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.

The BOI Report requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.

A beneficial owner is someone who owns at least part of a property or other asset, even if its legal title is owned by someone else. That person can also vote on or otherwise influence decisions regarding transactions involving that asset or property. An example is a corporate shareholder, Partner in a business, Landlords, Investors & Trustees.

The CTA Rules requires all reporting companies to identify, and provide certain information about, beneficial owners – defined as individuals who, either directly or indirectly, (1) own or control at least 25% of the ownership interests of a reporting company, or (2) exercise “substantial control” over the reporting company. As to the latter, FinCEN advises that an individual wields substantial control over a reporting company if he or she meets any of the four general criteria: (1) the individual is a senior officer; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision-maker; or (4) the individual has any other form of substantial control over the reporting company.

Generally, reporting companies must provide four pieces of information about each beneficial owner:

• name;
• date of birth;
• address; and
• the identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted. 

The company must also submit certain information about itself, such as its name(s) and address. In addition, reporting companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (“company applicants”).

Reporting companies fall under two categories: domestic and foreign reporting companies. A domestic reporting company is a corporation, limited liability company, or other entity that is created by the filing of a document with a secretary of state or similar office. Depending on the laws of the state of formation, certain partnerships may be considered reporting companies under the CTA. A foreign reporting company is a corporation, limited liability company, or other entity formed under the law of a foreign country and registered to do business in the United States by the filing of a document with a secretary of state or similar office.

Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Existing companies formed prior to 2024 have one year to file. New companies must file within 90 days of creation or registration.

Reporting companies must file their initial reports by the following deadlines:

• Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024, must file by January 1, 2025.
• Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

If there is any change to the required information about a reporting company or its beneficial owners in a beneficial ownership information report that a reporting company filed, the reporting company must file an updated report no later than 30 days after the date of the change.

• Any change to the information reported for the reporting company, such as registering a new business name.
• A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent.
• Any change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN. If a beneficial owner obtained a new driver’s license or other identifying document that includes a changed name, address, or identifying number, the reporting company also would have to file an updated beneficial ownership information report with FinCEN, including an image of the new identifying document.

Beneficial owners and company applicants should also be aware that they may face penalties if they willfully cause a reporting company to fail to report complete or updated beneficial ownership information.

The Financial Crimes Enforcement Network (FinCEN) is a US Treasury Department regulatory body that protects the financial system from illegal use, combating money laundering and terrorism financing. It collects, analyzes, and interprets financial data to design and implement laws, ensuring compliance with the Bank Secrecy Act and other financial crimes laws.

Learn more at FinCEN.gov