Update: On March 21, 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced a significant revision to the Corporate Transparency Act. Beneficial ownership information (BOI) reporting will no longer be required of U.S. companies or U.S. individuals. The program has been modified to require BOI reporting only by foreign entities that have filed documents with a Secretary of State or similar office. All U.S. companies and U.S. individuals are now exempt from filing and they will not incur any fines or penalties regarding BOI compliance. Foreign-owned reporting companies must file BOI reports within 30 days following the publication (March 26, 2025) of the interim final rule, April 25, 2025.
The Corporate Transparency Act seeks disclosure of the beneficial ownership information (“BOI”) of certain entities from people who own or control a company. The goal of this disclosure is to help combat money laundering, terrorism, and other illegal activities.
Who is a beneficial owner?
A beneficial owner is any individual who, directly or indirectly exercises “substantial control” over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company. Substantial control means directing, determining, or exercising substantial influence regarding important company decisions. This includes senior officers regardless of their title or ownership interests.
Who can report BOI?
BOI reporting entities, domestic and foreign, are corporations, limited liability companies (LLCs), or any similar entity that was created by the filing of a document with a secretary of state or any similar governing body under the law of a state or an Indian tribe. There are 23 types of entities that will not report BOI. Please review question C.2. here to determine the reporting status of your company: https://www.fincen.gov/boi-faqs#A_1
In addition, certain “large operating entities” will not file BOI by meeting the following criteria:
- Employing more than 20 people in the US.
- Having reported gross revenue (or sales) of over $5 million on the prior year’s tax return; AND
- Being physically present in the US.
Are there due dates to file?
It depends on when an entity registered with a governing body, or if there is a change to the beneficial owner’s information. New entities that are created and registered in 2024 would file within 90 days. New entities created AFTER December 31, 2024, will file within 30 days, and all other existing companies that were created and registered BEFORE January 1, 2024, will file by January 13, 2025. Additionally, if there are changes to previously reported information, these updates should be filed within 30 days.
What type of information needs to be disclosed?
Reporting companies will report the following:
- Full name of the reporting company
- Business address
- State or tribal formation jurisdiction
- IRS taxpayer ID number
Reporting companies will also report information on the beneficial owners such as:
- Name
- Birthdate
- Address
- Image of driver’s license/passport with identifying number
How REDW Can Help You
As a trusted advisor, REDW is here to help you navigate these complexities and ensure filing and reporting integrity. REDW can provide the appropriate resources to help clients identify needed reporting information and file. Our trusted experts can also help with input of the reviewed information into the Financial Crimes Enforcement Network (FinCEN) website.
