Corporate Transparency Act FAQs

Existing entities formed prior to January 1, 2024, will have until January 1, 2025, to report their initial report of beneficial owner information (BOI) to FinCEN.

Entities formed on or after January 1, 2024, will have 90 days after the date of formation to file their initial report of BOI. Updates to reports of BOI must be made within 30 calendar days after the date on which the change in BOI occurs. Errors in BOI reports must also be corrected within 30 calendar days after the reporting company has knowledge, or has reason to have knowledge, of the error.

Reporting companies subject to the CTA include:

• Corporations (including professional corporations)
• Limited liability companies (including professional limited liability companies)
• Limited partnerships
• Limited liability partnerships
• Business trusts
• Any other entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.

FinCEN recently released proposed regulations governing the CTA and trusts and has requested comments on how to apply the proposed regulations to certain kinds of trusts.

The following entities are among the 23 entities that are exempt from the reporting obligations of the CTA:

• Public companies
• Insurance companies
• Banks
• Registered investment companies and advisers and certain other entities subject to regulatory oversight
• Tax exempt entities
• Large operating companies which have (i) more than 20 full-time employees in the US, (ii) an operating presence at a physical office within the US, AND (iii) filed a federal income tax return in the US for the previous year reporting more than $5,000,000 in gross receipts or sales.

Beneficial owners are defined as natural persons who, directly or indirectly, own 25% or more of the reporting company’s equity interests or those who exercise substantial control over the reporting company.

Substantial control is defined as covering a company’s senior officers, persons with the authority to appoint or remove any senior officer or a majority of board members, and persons otherwise having the ability to provide direction or substantial influence on the company’s major decisions. A reporting company may have multiple beneficial owners.

BOI for up to two company applicants must be reported for entities formed on or after January 1, 2024. The two company applicants include the person who directly files the document(s) relating to the formation or registration of the reporting company, and the person who was primarily responsible for directing such filing. Entities formed prior to January 1, 2024, will not have to report BOI for their company applicants.

The following personal information will need to be reported for beneficial owners and company applicants: name, date of birth, current address and a distinctive identification number, such as from a passport or driver’s license. If an individual files their information with FinCEN directly, they may be issued a “FinCEN identifier” which can be used to report BOI instead of the required information. All reports will be filed electronically through FinCEN’s website. There will be no fee to file reports of BOI.

No, BOI reported to FinCEN will be stored in a secure, nonpublic database and the CTA imposes access requirements on requestors of BOI. BOI will be available to federal agencies engaged in national security, intelligence, and law enforcement activities; state and local law enforcement agencies in connection with criminal or civil investigations; and the U.S. Department of the Treasury.

Financial institutions may also have access to the information to conduct legally required customer due diligence if customers consent.