Starting January 1, 2024, many companies must report information to the U.S. government about who ultimately owns and controls them. Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a foreign or domestic company.
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 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.
Domestic reporting companies are corporations, limited liability companies, and any other entities created by filing a document with the secretary of state or a 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 registered to do business in the United States by filing a document with a secretary of state or any similar office.
There are 23 types of entities that are exempt from the reporting requirements, including tax-exempt entities, financial institutions, and insurance companies.
FinCEN will permit Federal, State, local, and Tribal officials and certain foreign officials who submit a request through a U.S. Federal government agency to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will also have access to beneficial ownership 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.
There is no fee for submitting your beneficial ownership information report to FinCEN. If you must report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s website.
You may avoid being penalized if you correct a mistake or omission within 90 days of the original report deadline. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.
The booklet Small Entity Compliance Guide can be downloaded from the Fincen website.
If you have any questions or need assistance with reporting this information, please give us a call. 618.713.9264