Financial Crimes Enforcement Act
FinCEN implemented these reporting requirements to strengthen the integrity of the U.S. financial system by making it harder for illicit actors to use shell companies to launder their money or hide assets. This video provides a short introduction to the Beneficial Ownership Information Report requirements.
Small Entity Compliance Guide
The small entity compliance guide provided by FinCEN defines requirements specific to Beneficial Ownership Information Reports (BOIR). It is intended as a explanatory piece, but may help you determine if you are required to report, what information needs to be reported, and what to do when information changes from your original report.
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Frequently Asked Questions
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Everyone is permitted to file their own BOI Report. The concern is if the information is filed incorrectly or another beneficial owner fails to file changes, you will be out of compliance and at risk of penalites.
What changes require a new BOI report?
If any information such as name, address, or identification changes for a beneficial owner then a new report must be submitted.
Is my information safe with CTASafe?
Yes. CTASafe prioritizes privacy, safety, and security. Your information will never be shared with other beneficial owners. Your name and email will be shared with company administrators, but the rest of your data remains private.
What should a reporting company report if its ownership is in dispute?
If ownership of a reporting company is the subject of active litigation and an initial BOI report has not been filed, a person authorized by the company to file its beneficial ownership information should comply with the requirements by reporting:
- all individuals who exercise substantial control over the company, and
- all individuals who own or control, or have a claim to ownership or control of, at least 25 percent ownership interests in the company.
If an initial BOI report has been filed, and if the resolution of the litigation leads to the reporting company having different beneficial owners from those reported (for example, because some individuals’ claims to ownership or control have been rejected), the reporting company must file an updated BOI report within 30 calendar days of resolution of the litigation.
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According to the FinCEN website:
If your company existed before January 1, 2024, it must file its initial beneficial ownership information report by January 1, 2025.
If your company was created or registered on or after January 1, 2024, and before January 1, 2025, then it must file its initial beneficial ownership information report within 90 calendar days after receiving actual or public notice that its creation or registration is effective. Specifically, this 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
If your company was created or registered on or after January 1, 2025, it must file its initial beneficial ownership information report within 30 calendar days after receiving actual or public notice that its creation or registration is effective. The following sets out the initial report timelines. .
What are the deadlines for filing in 2024?
According to the FinCEN website:
If your company existed before January 1, 2024, it must file its initial beneficial ownership information report by January 1, 2025.
If your company was created or registered on or after January 1, 2024, and before January 1, 2025, then it must file its initial beneficial ownership information report within 90 calendar days after receiving actual or public notice that its creation or registration is effective. Specifically, this 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
If your company was created or registered on or after January 1, 2025, it must file its initial beneficial ownership information report within 30 calendar days after receiving actual or public notice that its creation or registration is effective. The following sets out the initial report timelines. .
What penalties do individuals face for violating BOI reporting requirements?
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591.
A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
Who can be held liable for violating BOI reporting requirements?
Both individuals and corporate entities can be held liable for willful violations. This can include not only an individual who actually files (or attempts to file) false information with FinCEN, but also anyone who willfully provides the filer with false information to report. Both individuals and corporate entities may also be liable for willfully failing to report complete or updated beneficial ownership information; in such circumstances, individuals can be held liable if they either cause the failure or are a senior officer at the company at the time of the failure.
- i. Can an individual who files a report on behalf of a reporting company be held liable?
- Yes. An individual who willfully files a false or fraudulent beneficial ownership information report on a company’s behalf may be subject to the same civil and criminal penalties as the reporting company and its senior officers.
- ii. Can a beneficial owner or company applicant be held liable for refusing to provide required information to a reporting company?
Yes. As described above, an enforcement action can be brought against an individual who willfully causes a reporting company’s failure to submit complete or updated beneficial ownership information to FinCEN. This would include a beneficial owner or company applicant who willfully fails to provide required information to a reporting company.
What are the criteria for the inactive entity exemption from the beneficial ownership information reporting requirement?
An entity qualifies for the inactive entity exemption if all six of the following criteria apply:
| (1) The entity was in existence on or before January 1, 2020. |
| (2) The entity is not engaged in active business. |
| (3) The entity is not owned by a foreign person, whether directly or indirectly, wholly or partially. “Foreign person” means a person who is not a United States person. A United States person is defined in section 7701(a)(30) of the Internal Revenue Code of 1986 as a citizen or resident of the United States, domestic partnership and corporation, and other estates and trusts. |
| (4) The entity has not experienced any change in ownership in the preceding twelve-month period. |
| (5) The entity has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding twelve-month period. |
| (6) The entity does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity. |
FinCEN’s Small Entity Compliance Guide includes checklists for this exemption (see exemption #23) and for the additional exemptions to the reporting requirements (see Chapter 1.2, “Is my company exempt from the reporting requirements?”).
[Issued September 18, 2023]