The Financial Crimes Enforcement Network (FinCEN) has initiated the acceptance of beneficial ownership information reports from companies, in compliance with the bipartisan Corporate Transparency Act enacted in 2021. The Act aims to combat illicit finance by requiring companies operating in the United States to disclose information about the individuals who ultimately own or control them.
According to FinCEN, the reporting process is straightforward, secure, and free of charge. Companies obligated to comply, termed as "reporting companies," must adhere to specific deadlines for filing their initial reports:
Existing companies: Those created or registered to do business in the U.S. before January 1, 2024, must file by January 1, 2025.
Newly created or registered companies: Entities established or registered in 2024 have 90 calendar days to file after receiving notice of the effectiveness of their creation or registration.
Notably, beneficial ownership information reporting is not an annual requirement; a report only needs to be submitted once unless updates or corrections are necessary. Reporting companies are mandated to provide four key pieces of information about each beneficial owner: name, date of birth, address, and the identifying number and issuer from a non-expired U.S. driver’s license, passport, or a non-expired identification document issued by a State. A non-expired foreign passport is accepted if none of the mentioned documents exist, accompanied by a submitted image of the document.
Additionally, reporting companies must furnish certain details about themselves, such as names and addresses. For companies created on or after January 1, 2024, information about the individuals who formed the company, referred to as "company applicants," is also required.
Emphasizing their commitment to supporting small businesses, FinCEN aims to make the filing process quick and easy. The Small Entity Compliance Guide is designed to walk small businesses through the requirements in plain language. FinCEN provides informational videos, webinars, frequently asked questions, and a contact center for filers to access resources and guidance.
Filers seeking more information or guidance on reporting can visit www.fincen.gov/boi.
By fLEXI tEAM