Beneficial Ownership Reporting – What Does this Mean for your Small Business?

Beneficial Ownership Reporting – What Does this Mean for your Small Business?

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UPDATE: Due to a recent federal court order, reporting companies are not presently required to file beneficial ownership information with FinCEN. However, they may choose to voluntarily submit these reports. We will post updates as they become available.

Beneficial ownership reporting is the process of providing information to the US government about the people who ultimately own or control a company. The goal of this reporting is to increase transparency in business ownership and reduce illegal and fraudulent activity.

The Corporate Transparency Act of 2021 (CTA) is a federal law that requires businesses to disclose information about their owners and controllers to the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury.  The CTA went into effect on January 1, 2024 and companies must report the following information for each beneficial owner:

  • Legal name
  • Date of birth
  • Residential address
  • Unique identifying number from an acceptable ID document
  • Name of the state or jurisdiction that issued the ID document
  • Image of the ID document

Companies can file their reports electronically through FinCEN's website at no cost. Filing is usually a one-time requirement, unless the company needs to update or correct information.  There are substantial penalties for failure to file a report or provide false information.  

More information about beneficial ownership reporting is available on FinCEN's website at https://www.fincen.gov/boi.  For assistance with filing the required report, contact your business attorney or tax accountant.

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