Companies may now begin submitting their beneficial ownership information reports. The U.S. Department of the Treasury’s Financial Crimes...
Companies may now begin submitting their beneficial ownership information reports.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is now accepting beneficial ownership information reports, part of the Corporate Transparency Act (CTA), now in effect for newly formed companies. Existing companies will not have to comply until Jan. 1, 2025.
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While beneficial ownership information reporting is only required once - unless the filer needs to update or correct information – NSBA maintains that the CTA is unconstitutional. Furthermore, the guidance provided from FinCEN is vague, lacks details on who is actually required to report, and is unclear on what fully constitutes a "beneficial owner."
Generally, under the current provisions of the CTA, reporting companies must provide four pieces of information about each beneficial owner:
- Name;
- Date of birth;
- Address; and
- The identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.
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In Nov. 2023, NSBA filed a lawsuit over the lack of clarity in the CTA and the inevitable administrative costs this new practice will impart on small-business owners across the country. A ruling on the case is still pending.
For more information on these new reporting requirements, please review FinCEN’s Small Entity Compliance Guide, or visit fincen.gov/boi.