In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government's effort to make it more difficult to launder money, avoid taxes, or finance terrorists.
The Financial Crimes Enforcement Network (FinCEN) launched the BOI E-filing website for reporting beneficial ownership information on January 1, 2024. The purpose of this reporting is to identify financial flows of money across borders that is illegal in its source (corruption/smuggling), its transfer (tax evasion), or its use (terrorist financing).
Who must report?
Companies required to file are referred to as "Reporting Companies". Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States. Foreign reporting companies are entities formed under the law of a foreign country that have registered to do business in the United States.
What information is reported?
Generally, the pieces of information reported for each beneficial owner are name, date of birth, address and their identifying number from a non-expired US driver's license, passport, or state ID. An image of the document will also need to be submitted. Information is stored in a secure, non-public FinCEN database.
Deadlines for Filing:
Existing companies created prior to January 1, 2024 are required to file by January 1, 2025. Companies created in 2024 have 90 calendar days to file after receiving notice of effective creation or registration.
This is not an annual filing requirement. A report only needs to be submitted once, unless ownership or business information changes.
Exemptions: 23 categories of entities are exempt, including publicly traded companies, many nonprofits, certain large operating companies, inactive entities, and companies with more than $5 million in gross receipts meeting other criteria.
Filing is free at fincen.gov/boi. FinCEN has warned about fraudulent correspondence titled "Important Compliance Notice" — do not respond to unsolicited requests or click links/scan QR codes.