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.
Beginning on January 1, 2024, the Corporate Transparency Act (CTA) seeks beneficial ownership information (BOI) from more than 98% of U.S. small business owners. Reporting companies that were formed before January 1, 2024, would complete their initial Beneficial Ownership Information (BOI or BOIR) report and register it with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) by January 13, 2025.
As part of the Anti-Money Laundering Act of 2020 (AML Act), the intention of the CTA is to provide law enforcement agencies with information needed to better detect, prevent, and punish terrorism, money laundering, and other crimes that involve United States corporations and limited liability companies.
To comply with the CTA, business owners will need to provide information to the U.S. Government about all individuals who either directly or indirectly exercise substantial control over the reporting company or own or control at least 25% of the ownership interests of the reporting company.
Corporate Transparency Act Online Filing
FinCEN will administer the CTA program which seeks for certain business entities to submit details about each business owner through the BOI online reporting form.
The new BOI reporting form is now available for review and entry and businesses are encouraged to seek trusted guidance before filing.
Businesses will be able to obtain a FinCEN Identifier number that they can use to file their initial BOI and will continue using it to provide updates or corrections regarding the ownership or dissolution of the business. Alternatively, the number can be obtained when filing their first report although it is not currently required. Getting an identifier can facilitate submission of BOI reports by more than one individual.
Beneficial Owners
When reporting, the new FinCEN BOI reports require filers to collect and submit specific information for beneficial owners:
- The individual’s name
- Date of birth
- Residential address
- An identifying number such as one from a passport or U.S. driver’s license
- An image of the identification document
While ownership interest is simple to define, beneficial owners also include those that exercise substantial control over the company. The substantial control threshold is met by those who meet any of four criteria:
- A senior officer
- Has authority to appoint or remove certain officers or a majority of the directors of the reporting company
- An important decision-maker—someone who directs, determines, or has substantial influence over important decisions e.g. the business, finances, or structure of the entity.
- Any other form of substantial control over the company
It’s important to note that parent companies may not file a single BOI on behalf of a group of companies.
BOI Reporting Exemptions and Foreign-Owned Entities
While there are 23 categories of businesses that will not file BOI, they are limited to those that are governed by other U.S. Government regulatory requirements or agencies. Some examples include banks, insurance companies, and public utilities.
Foreign-owned companies that are registered to do business in any U.S. State or Tribal jurisdiction will file BOI reports and provide detailed ownership information.
REDW’s Trusted Tax Advisors Are Here to Help
Complying with the new Corporate Transparency Act legislation—or any of the anti-money-laundering and counter-terrorism-financing laws—can be challenging, particularly for more complex organizations. Our trusted tax advisors are here to help you understand how to determine your filing requirements and provide information to be reported.
Contact James Ortiz or Brandon Remley for additional information.
