Any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The rule defines the terms “substantial control” and “ownership interest.”  In keeping with the CTA, the rule exempts five types of individuals from the definition of “beneficial owner.”

• In defining the contours of who has substantial control, the rule sets forth a range of activities that could constitute substantial control of a reporting company. This list captures anyone who is able to make important decisions on behalf of the entity. FinCEN’s approach is designed to close loopholes that allow corporate structuring that obscures owners or decision-makers. This is crucial to unmasking anonymous shell companies.
• The rule provides standards and mechanisms for determining whether an individual owns or controls 25 percent of the ownership interests of a reporting company. Among other things, these standards and mechanisms address how a reporting company should handle a situation in which ownership interests are held in trust.

Businesses filing a BOI report need to include the following information in their initial filing:

• The full legal name of the business
• Any nicknames or trade names that the business alternatively operates under
• The current street address of the business’ location
• The jurisdiction in which the business was formed
• Taxpayer identification number

Similarly, a business’s beneficial owners and company applicants must include their full legal names, dates of birth, and current residential address alongside an identifying number, such as a:

• US passport
• Local or state ID
• Driver’s license number
• A foreign passport, if applicable

Beneficial owners and company applicants will need to include pictures of their chosen document in the report.

Beginning on January 1, 2024, the Financial Crimes Enforcement Network, FinCEN, will require businesses in all sectors to file beneficial ownership information, or BOI reports, in an effort to reduce money laundering and other illicit financial efforts.

Businesses established prior to 2024 must file BOI reports by January 1, 2025. Businesses formed in 2024 must file BOI reports within 90 days of its formation date.

Businesses established prior to 2024 must file BOI reports by January 1, 2025. Businesses formed in 2024 must file BOI reports within 90 days of its formation date.

According to FinCEN, the following businesses that do not have to file BOI reports include:

• Certain types of securities reporting issuers.
• A U.S. governmental authority.
• Certain types of banks.
• Federal or state credit unions as defined in section 101 of the Federal Credit Union Act.
• Bank holding company
• Certain types of money transmitting or money services businesses.
• Any broker or dealer, as defined in section 3 of the Securities Exchange Act of 1934, that is registered under section 15 of that Act (15 U.S.C. 78o).
• Securities exchanges or clearing agencies as defined in section 3 of the Securities Exchange Act of 1934, and that is registered under sections 6 or 17A of that Act.
• Certain other types of entities registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934.
• Insurance companies defined in section 2 of the Investment Company Act of 1940.
• Certain types of venture capital fund advisers.
• State-licensed insurance producers with an operating presence at a physical office within the United States, and authorized by a State, and subject to supervision by a State’s insurance commissioner or a similar official or agency.
• Commodity Exchange Act registered entities.
• Any public accounting firm registered in accordance with section 102 of the Sarbanes-Oxley Act of 2002.
• Certain types of regulated public utilities.
• Any financial market utility designated by the Financial Stability Oversight Council under section 804 of the Payment, Clearing, and Settlement Supervision Act of 2010.
• Certain pooled investment vehicles.
• Certain types of tax-exempt entities.
• Certain entities assisting a tax-exempt entity
• Large operating companies with at least 20 full-time employees, more than $5,000,000 in gross receipts or sales, and an operating presence at a physical office within the United States.
• The subsidiaries of certain exempt entities.
• Certain types of inactive entities that were in existence on or before January 1, 2020, the date the Corporate Transparency Act was enacted.