Corporate Transparency Act

23 types of entities are exempt from the beneficial ownership information reporting requirements.
The most relevant exceptions are:

1. Non-profit organizations
2. Trusts
3. Large companies*

*A large operating company has gross receipts of over $5,000,000 annually and has more than 20 full-time employees in the United States.

• Existing entities must report their name, address, Tax ID (EIN), and all their beneficial owners. 

Each owner must disclose their name, address, date of birth, and a form of ID (either a current passport or driver’s license.) No Social Security number is required.

• New entities (post 1/1/2024) must also provide information relating to the applicant.

Beneficial Ownership is someone who has substantial control over a company or is a significant owner. For example: President, CEO, COO, CFO, and all other high-level executives with substantial control over decision-making. Ownership is 25% in any form.

• All entities created by 12/31/2023 have until 12/31/2024 to file.
• Entities created since 12/31/2023 have 90 days from their creation to file.
• In the future, entities created after 12/31/2024 will have 30 days from their creation to file.

Each entity only needs to file once in its existence. There are many events however, that can trigger an updated filing requirement.

• Any change to the information reported for the reporting company, such as registering a new business name.
• A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent.
• Any change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN. If a beneficial owner obtained a new driver’s license or other identifying document that includes a changed name, address, or identifying number, the reporting company also would have to file an updated beneficial ownership information report with FinCEN, including an image of the new identifying document.

You must file an update within 30 days of any change.

Non-compliance with the Corporate Transparency Act may result in a $591 penalty per day, a $10,000 fine, or criminal charges with 2-5 years imprisonment.

A “FinCEN identifier” is a unique identifying number that FinCEN will issue to an individual or reporting company upon request after the individual or reporting company provides certain information to FinCEN. When a beneficial owner or company applicant has obtained a FinCEN identifier, reporting companies may report the FinCEN identifier of that individual in the place of that individual’s otherwise required personal information on a BOI report.

Individuals may request a FinCEN identifier by completing an electronic web form at https://fincenid.fincen.gov. Individuals will need to provide their full legal name, date of birth, address, unique identifying number and issuing jurisdiction from an acceptable identification document, and an image of the identification document. After an individual submits this information, they will immediately receive a unique FinCEN identifier.

Reporting companies may request a FinCEN identifier by checking a box on the beneficial ownership information report upon submission. After the reporting company submits the report, the company will immediately receive a unique FinCEN identifier. If a reporting company wishes to request a FinCEN identifier after submitting its initial beneficial ownership report, it may submit an updated beneficial ownership information report requesting a FinCEN identifier, even if the company does not otherwise need to update its information.