In 2021, Congress enacted a new piece of legislation intended to deter money laundering, terrorism, and other illegal activities. The law requires certain companies, known as Reporting Companies, to report information about their Beneficial Owners to the Financial Crimes Enforcement Network (FinCEN) unless they qualify for an exemption under the CTA.
| Exemption No. | Exemption Short Title |
|---|---|
| 01 | Securities reporting issuer |
| 02 | Governmental authority |
| 03 | Bank |
| 04 | Credit union |
| 05 | Depository institution holding company |
| 06 | Money services business |
| 07 | Broker or dealer in securities |
| 08 | Securities exchange or clearing agency |
| 09 | Other Exchange Act registered entity |
| 10 | Investment company or investment adviser |
| 11 | Venture capital fund adviser |
| 12 | Insurance company |
| 13 | State-licensed Insurance producer |
| 14 | Commodity Exchange Act registered entity |
| 15 | Accounting firm |
| 16 | Public utility |
| 17 | Financial market utility |
| 18 | Pooled investment vehicle |
| 19 | Tax-exempt entity |
| 20 | Entity assisting a tax-exempt entity |
| 21 | Larger operating company |
| 22 | Subsidiary of certain exempt entities |
| 23 | Inactive entity |
The failure to report complete or updated Beneficial Ownership Information to FinCEN, or the willful provision of or attempt to provide false or fraudulent Beneficial Ownership Information may result in civil or criminal penalties, including civil penalties of up to $591 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI Report may be held accountable for that failure. Additionally, a person may be subject to civil and/or criminal penalties for willfully causing a company not to file a required BOI Report or to report incomplete or false Beneficial Owner Information to FinCEN.
If the company is a Reporting Company, the next step is to identify its Beneficial Owners.
A Beneficial Owner is any individual who, directly or indirectly:
A Reporting Company can have multiple Beneficial Owners. Reporting Companies are not required to report the reason (i.e., substantial control or ownership interests) that an individual is a Beneficial Owner. If an individual qualifies as a Beneficial Owner, information about the individual must be reported to FinCEN in a Reporting Company’s BOI Report. There is no maximum number of Beneficial Owners who must be reported.
Only companies formed on/after Jan. 1, 2024, must report Company Applicants. No more than two Company Applicants must be identified.
The following checklist may help identify the information about the Reporting Company and
its Beneficial Owners and Company Applicants that are required to collect and report:
Not all Reporting Companies are required to report information about Company Applicants. See Section 3 for assistance in identifying whether a Reporting Company is required to report information about its Company Applicants.
Individuals may apply electronically for FinCEN Identifiers. FinCEN will issue each individual a unique identifying number.
Reporting Companies may include FinCEN identifiers in their BOI Reports instead of certain required information about Beneficial Owners and Company Applicants.
FinCEN began accepting BOI Reports electronically through its secure filing system beginning January 1, 2024.
Required by all companies that meet the definition of a Reporting Company and that do not qualify for an exemption.
Created or registered to do business in the United States before January 1, 2024. Reports are due by January 1, 2025.
Created or registered to do business in the United States on or after January 1, 2024. Reports are due within 90 calendar days of receiving actual or public notice that the creation or registration of the Reporting Company is effective. *Reporting Companies formed on or after Jan 1, 2025 have 30 days.*
*If a company was previously qualified for an exemption to the Reporting Company definition but no longer qualifies, then the Reporting Company is required to file a BOI Report within 30 calendar days of the date on which the company stops qualifying for the exemption.
If a Reporting Company is required to file a BOI Report, this must be done electronically through a secure filing system. FinCEN published instructions and other technical guidance on how to complete the BOI Report. This guidance is available at: www.fincen.gov/boi.
In addition to filing an initial BOI Report, Reporting Companies must also update and correct information in previously filed BOI Reports. Individuals who obtain FinCEN identifiers must also update and correct information previously reported to FinCEN.
Required when there is a change to previously reported information about the Reporting Company itself or its Beneficial Owners.
Updated Reports are due within 30 calendar days after a change occurs.
Required when previously reported information was inaccurate.
Corrected Reports are due within 30 calendar days after the Reporting Company becomes aware or has reason to know of an inaccuracy.
If a Reporting Company files a BOI Report and later qualifies for an exemption from the reporting requirements, the company should file an updated BOI Report to indicate that it is newly exempt from reporting requirements.
