Financial Crimes Enforcement Network (FinCEN) has prepared some information on the complex Beneficial Ownership Information Reporting Rule.
What is beneficial ownership?
Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company. In 2021, Congress passed the Corporate Transparency Act, which created a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
FinCEN will permit certain government officials to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will also have access to information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.
The reporting process
FinCen began accepting beneficial ownership information as of January 1, 2024. A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report. A reporting company created or registered on or after January 1, 2024, will have 30 days to file its initial beneficial ownership information report. This 30-day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s website. There will be no fee for submitting your beneficial ownership information report to FinCEN.
Does this affect my company?
Companies required to report are called reporting companies. There are two types of 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 (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
However, many kinds of entities will be exempt from reporting requirements.
To learn more about beneficial ownership information reporting, click here. To begin filing your report, click here.
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