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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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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