FinCEN stands for the Financial Crimes Enforcement Network. It’s a bureau of the United States Department of the Treasury tasked with combatting financial crimes, including money laundering, terrorist financing, and other illicit activities. FinCEN collects and analyzes information related to financial transactions to support law enforcement efforts and protect the financial system from abuse. It also regulates various financial institutions and implements anti-money laundering (AML) and counter-terrorist financing (CTF) regulations to promote transparency and integrity in the financial industry.

The Corporate Transparency Act (CTA) is a federal law passed in the United States aimed at combating illicit activities such as money laundering, terrorist financing, and tax evasion. It requires certain businesses, particularly those formed or registered in the United States, to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). Beneficial ownership refers to individuals who directly or indirectly own or control a significant portion of the business. The CTA aims to enhance transparency in corporate structures, making it more difficult for criminals to exploit anonymous shell companies for illegal activities.

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.

According to FinCEN: 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 will have access to beneficial ownership information in certain circumstances, with the company’s consent. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.

Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using 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. FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling in a way that protects its security and confidentiality.

Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.

Businesses, corporations, limited liability companies, and any other entity that has formed with a secretary of state or any similar office in the United States This includes companies formed under the law of a foreign country that have registered to do business in the U.S. We make it easy to check whether your business is required to file with just a few simple questions–no need to share personal information or pay anything to check. See if my business is required to file.

Updated reports are required when there are changes to previously reported information about the owners or controlling members of a business, or their identifying information. For example, an updated Beneficial Ownership Information Report is required when a controlling member’s primary residential address changes or when the ID that they submitted with the original report expires. Additionally, an updated Beneficial Ownership Information Report is also required if initially reported information is incorrect or if entities amend their formation documents. Businesses have 30 days from the date of the change or amendment to file an updated Beneficial Ownership Information Report.

Our annual plan takes this burden off of you so that you can enjoy peace of mind and can focus instead on running and growing your business.

Companies formed before 2024 will have until January 1, 2025 to disclose beneficial ownership information, while those formed in 2024 and 2025 onwards will have 90 days and 30 days, respectively, from the date of formation to file their initial report.

No, unless a sole proprietorship was created (or, if a foreign sole proprietorship, registered to do business) in the United States by filing a document with a secretary of state or similar office. Filing a document with a government agency to obtain (1) an IRS employer identification number, (2) a fictitious business name, or (3) a professional or occupational license does not create a new entity, and therefore does not make a sole proprietorship filing such a document a reporting company.

A reporting company will have to report:

1. Its legal name;
2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
3. The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters);
4. Its jurisdiction of formation or registration; and
5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

A reporting company will also have to indicate whether it is filing an initial report, or a correction or an update of a prior report.

Companies are required to submit the following on their beneficial owners:

1. The individual’s name
2. Date of birth
3. Residential address
4. A photo/image of an acceptable identification document such as a passport or U.S. driver’s license, and certain data from that document

No. Reporting companies must report beneficial ownership information directly to FinCEN. State or local governments, financial institutions, and other federal agencies, such as the IRS, may separately require companies to report certain beneficial ownership information. However, by law, those requirements are not a substitute for reporting beneficial ownership information to FinCEN.

Yes. In addition to companies in the 50 states and the District of Columbia, a company that is created or registered to do business by the filing of a document with a U.S. territory’s secretary of state or similar office, and that does not qualify for any exemptions to the reporting requirements, is required to report beneficial ownership information to FinCEN. The following are U.S. territories: the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and the U.S. Virgin Islands.

A beneficial owner is an individual who either directly or indirectly exercises substantial control over the reporting company, or owns or controls at least 25% of the reporting company’s ownership interests.

FinCEN outlines four key categories by which an individual may exercise substantial control over a company. These include senior officers, the ability to appoint or remove company authority, anyone with substantial influence over important company decisions, and finally a “catch-all” category to account for individuals who exercise control in “new and unique ways” or through various reporting structures. Our technology will help you easily and accurately navigate these sorts of questions for your business.

Dibble is the go-to destination for small and medium-sized business owners looking for help navigating the federal government’s new Beneficial Ownership Information Reporting requirement. As the leading online BOI filing platform, we’ve streamlined the process, making it effortless for businesses to accurately and securely file their BOI Report with FinCEN through our swift online filing technology.

The Corporate Transparency Act is one of the most important legislations to impact small businesses owners. The Beneficial Ownership Information Reporting Rule—a new requirement under this legislation—is effective Jan. 1, 2024 and mandates that most limited liability companies and corporations must file the beneficial owner report.

Although some companies may attempt to file themselves, given the nuances and complexities of this new federal requirement, the majority of companies will likely opt for assistance to ensure accuracy, meet the strict deadlines, and avoid errors, penalties, and the distraction to their business.