A final rule was issued in September 2022, which implemented the beneficial ownership information reporting requirements of the Corporate Transparency Act (CTA). These regulations will come into effect from January 1, 2024.
The CTA affirms equivalent beneficial ownership information requirements for specific entities like some types of corporations, limited liability companies, and similar commodities registered or created in the United States. The task of collecting the information and providing it to the approved government authorities and financial associations is given to FinCEN by CTA.
The CTA will provide this crucial information to national security agencies, law enforcement, financial institutions and other authorised agencies. This will help to prevent criminals, financial fraudsters, terrorists and corrupt autocrats from masking illegal money or other possessions in the United States. Further, this article will provide all the data you need about beneficial ownership information reporting.
What is Beneficial Ownership Information (BOI)?
BOI indicates the information about the people who directly or indirectly own or have control over the company. BOI reporting is extremely important for tracking the criminals who illegally store their money in shell or front companies. Companies need to reveal their owners, which makes it easy to follow the criminals and prosecute them. By collecting and disclosing BOI, FinCEN makes it harder for criminals to hide their money or possessions illegally.
Who must report beneficial ownership to FinCEN?
If you’re unsure about reporting beneficial ownership information to FinCEN, don’t worry – we’re here to assist you. The companies that are required to register are referred to as reporting companies. Reporting companies are of two types: domestic reporting companies and foreign reporting companies.
A company defined as a corporation or limited liability company or any such entity created by filing documents with the secretary of state or any such office under the law of a state or Indian tribe is known as a domestic reporting company. On the other hand, a company is defined as a corporation or limited liability company or any such entity formed under the law of any foreign country and is registered to do business in any US state or any tribal jurisdiction by filing documents with a secretary of state or any such office under the law of state or Indian tribe is known as a foreign reporting company. If you have a company which has filed documents with a state or Indian tribal office, such as the secretary of state or if you need to register your company to do business as a foreign company, then it is a reporting company.
When should I report my company’s beneficial ownership information to FinCEN?
As the regulation will come into effect from January 1, 2024, FinCEN won’t be accepting any company’s beneficial ownership information before that. If your reporting company got registered or created to do business before January 1, 2024, you will have a time of 1 year, that is, till January 1, 2025, to file your company’s initial beneficial ownership information report.
On the other hand, if your company gets created or registered to do business on or after January 1, 2024, you will be provided with 30 days to file your company’s initial beneficial ownership information report. This 30 days deadline will be started after your company receives an important notice that the company is effectively created or registered or after a secretary of state or any such office first provides a public statement of creation or registration of your company.
What information must be reported?
There are several things to report for a reporting company. The first among them is reporting about itself, which includes reporting its permitted name and any trade names like doing business as(d/b/a) or trading as(t/a) names. You also have to provide the present address from where the company operates in the United States, like a domestic reporting company. If your company’s principal place of operation is outside the United States, you will be required to provide the present address from where the company operates its business in the United States, for example, as a foreign reporting company’s headquarters in the US.
The other things to report are its jurisdiction of creation or registration and its Taxpayer Identification Number (TIN). Moreover, the reporting company will also have to signify the type of filing it is making, which includes whether it is filing an initial report, a correction of a previous report or an update of the last report.
The next thing which is required to be reported by the reporting company is the details of each individual who is a beneficial owner or a company’s applicant. The reporting company will have to report the name of the individual, a unique identification number from an authorized identification document and the name of the state or jurisdiction that issued the identification document.
The next thing to report about beneficial owners and the company’s applicant is their residential street address. In contrast, if the company’s applicant gets engaged in the business of corporate formation and files the registration or creation documents in the course of the business, then the reporting company has to report the present street address of the company applicant’s business. The identification documents which will be accepted are a non-expired driver’s license issued by a US state or a non-expired identification document issued by a US state, local government or Indian Tribe, which is published for the objective of identification or a non-expired passport issued by the US government.
If the individual doesn’t have any of the above-listed identification documents, the reporting company may provide the identifying number from a non-expired passport issued by a foreign government.
How do I submit my company’s beneficial ownership information for reporting?
If your company is a reporting company and must report the beneficial ownership information, the reporting process of the company’s beneficial ownership information to FinCEN will be conducted through an electronic medium. The reporting process will be done through a secure filing system via FinCEN’s website. The filing system is currently under development.
Need any expert assistance in BOI reporting?
All companies created or registered before January 1, 2024, will have to report their beneficial ownership report between January 1, 2024, and January 1, 2025. If your company is created on January 1, 2024, or after that, you will be provided with 30 days to report your company’s initial beneficial ownership information.
If you have any confusion and need expert assistance on BOI reporting, you can contact IncParadise. We will provide you with all the services you need to report your company’s beneficial ownership information. IncParadise will help you in BOI reporting in the best possible and easiest way. IncParadise provides services which are second to none. IncParadise has thousands of satisfied clients who trust IncParadise to set up a corporation or a limited liability company. If you have any doubts regarding beneficial ownership information, follow the above article to get all the required details.