Beneficial Ownership Information (BOI)

The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance and protect U.S. national security, requires many companies doing business in the United States to report information to the Federal government about their beneficial owners—in other words, the real people who ultimately own or control them. The Financial Crimes Enforcement Network (FinCEN), a U.S. Treasury Department bureau, is implementing the law. Constituents should know:

• Filing is quick, secure, and free, and most companies should be able to report without the help of an accountant or lawyer.
• For companies with simple ownership structures, filing may take less than 20 minutes.
• Unless a company needs to update or correct information, it is a one-time filing requirement.

• Reporting companies created or registered before January 1, 2024 have until January 1, 2025 to file.
• Reporting companies created or registered in 2024 must file within 90 calendar days after receiving actual or public notice that their creation or registration is effective, whichever is earlier.
• Reporting companies created or registered on or after January 1, 2025 must file within 30 calendar days after receiving actual or public notice that their creation or registration is effective.
• Any updates or corrections to beneficial ownership information previously filed with FinCEN must be submitted within 30 days

Reporting companies need to report just a few pieces of information about themselves and their beneficial owners—and in some cases, their company applicants—such as name, address, and date of birth.  

A person who willfully violates beneficial ownership reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues, as well as criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.

The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Treasury Department. Its mission is to safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.

Companies can file at https://boiefiling.fincen.gov/ or visit https://www.fincen.gov/boi for more information.

• Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, for authorized activities related to national security, intelligence, and law enforcement;
• financial institutions in certain circumstances, with the consent of the reporting company; and
• those financial institutions’ regulators when they supervise the financial institutions.

The database uses rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level.

A company may need to report beneficial ownership information to FinCEN if it is:

• a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
• a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.

Many big companies already have to disclose their ownership details to Federal regulators through other means. To refrain from creating redundant reporting requirements, the Corporate Transparency Act primarily focuses on preventing illicit finance through smaller corporate entities by creating a uniform reporting process at the Federal level.