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Beneficial Ownership Information Reporting

General Information

Beneficial ownership information refers to identifying information about the
individuals who directly or indirectly own or control a company. These reporting requirements were set forth in the Corporate Transparency Act. 

Why do you need to Report?

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This
law creates a new beneficial ownership information reporting requirement as part of
the U.S. government’s efforts to make it harder for bad actors to hide or benefit from
their ill-gotten gains through shell companies or other opaque ownership structures.

Reporting Companies

Companies required to report are called reporting companies. There are two types of
reporting companies:
•     Domestic reporting companies are corporations, limited liability companies, and
any other entities created by the filing of a document with a secretary of state
or any similar office in the United States.
•     Foreign reporting companies are entities (including corporations and limited
liability companies) formed under the law of a foreign country that have
registered to do business in the United States.

Benificial Owner

A beneficial owner is an individual who either directly or indirectly: (1) exercises
substantial control over the reporting company, or (2) owns or
controls at least 25% of the reporting company’s ownership interests.

Substantial Control

An individual can exercise substantial control over a reporting company in four
different ways. If the individual falls into any of the categories below, the individual
is exercising substantial control:
•     The individual is a senior officer (the company’s president, chief financial
officer, general counsel, chief executive office, chief operating officer, or any
other officer who performs a similar function).
•     The individual has authority to appoint or remove certain officers or a
majority of directors (or similar body) of the reporting company.
•     The individual is an important decision-maker for the reporting company.
See Question D.3 for more information.
•     The individual has any other form of substantial control over the reporting
company as explained further in FinCEN’s Small Entity Compliance Guide.

Company Reporting Information

A reporting company will have to report:

  1. Its legal name;

  2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a)names;

  3. The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters); 

  4. Its jurisdiction of formation or registration; and

  5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

A reporting company will also have to indicate whether it is filing an initial report,
or a correction or an update of a prior report.

Benificial Owner Reporting Information

For each individual who is a beneficial owner, a reporting company will have to provide:

  1. The individual’s name;

  2. Date of birth;

  3. Residential address; and

  4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document (for examples of acceptable identification, see Question F.5).

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

Companies Exempt from Reporting

There are 23 types of entities are exempt from the beneficial ownership information
reporting requirements. These entities include publicly traded companies meeting
specified requirements, many nonprofits, and certain large operating companies. A list is below:

  • Securities reporting issuer

  • Governmental authority

  • Bank

  • Credit union

  • Depository institution holding company

  • Money services business

  • Broker or dealer in securities

  • Securities exchange or clearing agency

  • Other Exchange Act registered entity

  • Investment company or investment adviser

  • Venture capital fund adviser

  • Insurance company

  • State-licensed insurance producer

  • Commodity Exchange Act registered entity

  • Accounting firm

  • Public utility

  • Financial market utility

  • Pooled investment vehicle

  • Tax-exempt entity

  • Entity assisting a tax-exempt entity

  • Large operating company

  • Subsidiary of certain exempt entities

  • Inactive entity

Companies should carefully review the qualifying criteria before concluding that they are exempt, our team can help you determine if your company and its beneficial owners are required to report. . 

Additional Informaiton 

The above information was made available by the Financial Crimes Enforcement Network, a Department of the U.S. Treasury. For more information or to find the source of the above information, please visit their website: BOI, or reach out to our team and we will help answer any questions you may have and will help facilitate your reporting requirement. 

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