In an effort to enhance transparency and curb illicit financial activities, the U.S. government passed the Corporate Transparency Act in 2021. This legislation introduces beneficial ownership information (BOI) reporting requirements, compelling companies to disclose information about individuals who own or control them.
Understanding Beneficial Ownership Information
Beneficial ownership information involves identifying details about individuals who have direct or indirect ownership or control over a company. This information aims to dismantle the opacity of shell companies and other complex ownership structures, making it more challenging for malicious actors to conceal their ill-gotten gains.
Who can access to Beneficial Ownership Information
Under this act, FinCEN (Financial Crimes Enforcement Network) governs access to reported beneficial ownership information. Authorized entities, including Federal, State, local, and Tribal officials, as well as certain foreign officials, can access this data for activities related to national security, intelligence, and law enforcement. Financial institutions may also access the information with the consent of the reporting company, and their regulators will supervise this access to ensure compliance with security and confidentiality protocols.
Filing Beneficial Ownership Information
Companies required to report must file their beneficial ownership information electronically through the secure filing system available on FinCEN's BOI E-Filing website. The reporting process is user-friendly, allowing most companies to fulfill their obligations without the need for legal or accounting assistance.
Who Can File and Exemptions
Authorized employees, owners, or third-party service providers can file BIO on a companies behalf. About 85 - 90% of all companies will be required to report, the flow chart below will help determine if your company is exempt.
We Can Help
Do you need help understanding whether this applies to you? Or need help reporting? Contact us today for more information about CTA and what you need to do as a business owner.