5 Things You Should Know About Beneficial Ownership Information Reporting

Effective January 1, 2024, the Corporate Transparency Act (CTA) requires all reporting companies to file their company's beneficial ownership reporting (BOI) with FinCEN. If you’re new to this information or currently struggling with your FinCEN reporting, you need proper guidance to better understand how to go about your BOI filling.

For guidance, you can always work with experts at FinCEN Reporting. This firm has a team of experts, who are readily available to assist you and provide answers to any questions you may have. Below are a few commonly asked questions and answers that’ll help you better understand the requirements for CTA compliance.

Which companies qualify for beneficial ownership reporting to FinCEN?

If you’re new to the Corporate Transparency Act, there’s a very high chance that you don't know whether or not your company qualifies for BOI reporting. If that’s the truth, below are a few ways to confirm your eligibility:

1. According to the CTA, a company mostly qualifies for BOI reporting if it’s a corporation or limited liability company (LLC). The bottom line here is that your firm is most certainly a reporting company if it’s an LLC or corporation.

2. Furthermore, the act says that organizations that were initially registered or created by filing a document with a secretary of state are reporting companies.

Your organization may not be a reporting company only if it falls under the categories of companies exempted from CTA compliance.

Are there any CTA exemptions?

Of course, the Corporate Transparency Act exempts certain entities from the CTA compliance requirement. There are 23 exemptions, grouped into these two categories:

• Publicly traded companies

• Companies that are already mandated to do BOI reporting. They include registered brokers, financial institutions, and insurance companies.

• Entities regulated by other federal agencies.

The purpose of these exemptions is to prevent the burden of duplicative BOI reporting 

When should reporting companies start BOI reporting to FinCEN?

Well, there are two answers to this question, depending on the category of reporting companies you belong to.

Is your company already registered before January 1, 2024?

If your foreign or domestic reporting company was registered with a secretary of state’s office before January 1, 2024, you’re expected to submit your initial beneficial ownership information (BOI) report to FinCEN before January 1, 2025.

Did you recently register the company (on/after January 1, 2024)?

If you own a reporting company that was registered on January 1, 2024, or after, you need to file a BOI report after being notified of the effectiveness of its formation. In this case, you have 90 days to file your BOI report.

What key information should you include in BOI reporting

For your reporting company to avoid penalties (civil and criminal), you need to accurately include the necessary information about:

• Your company

• Beneficial owner

• Your company’s applicant

For your company

You need to gather accurate information regarding your company. Below are a few things you need to add to the beneficial ownership information reporting:

• Your company’s full legal name

• The company’s DBA names

• The current address in the Us

• Jurisdictions

• Taxpayer identification number.

For your beneficial owner & company’s applicant(s)

You need to gather accurate information about the company’s beneficial owner for reporting. They include:

• The beneficial owner’s name

• Residential address in the US

• Date of birth

• Unique ID number

Are there any penalties for non-CTA compliance?

Well, there are two types of penalties for reporting companies that willfully violate requirements for CTA compliance.

• Civil penalties

• Criminal penalties

Willful violation or misreporting could attract a civil penalty of $500 daily (capped at $10,000) for as long as the violation continues. A jail time of 2 years also applies with a fine of up to $10,000.