These new reporting requirements are for business entities including Corporations, Limited Liability Companies, Limited Liability Partnerships. These entities will now have to file a report listing their Beneficial Owners and Applicants to FinCEN (Financial Crimes Enforcement Network), under the Corporate Transparency Act (CTA). The CTA is part of the Anti-Money Laundering Act of 2020 and is intended to prevent criminals, terrorists, and corrupt actors from using shell front companies to hide their identities and assets in the U.S.
A beneficial owner is defined as an individual who directly or indirectly owns or controls at least 25% of the ownership interests of a company/entity or one who exercises substantial control over it. An applicant is an individual who files an application to form or register a reporting company or entity.
The new CTA requires reporting entities to provide the following information on each Beneficial Owner and Applicant; name, birthdate, address, unique identifying number from an acceptable identification document along with a copy of said document.
The rule was issued in September 2022 and will go into effect on January 1, 2024. FinCEN will not accept BOI reports prior to that date.