Corporate Transparency Act Reporting Requirements

The 2024 Corporate Transparency Act Reporting Requirements by FinCEN Mandate Around 118.5 Million Burden Hours for Existing Reporting Companies, Requiring Them To Provide Specific Information About Owners and Applicants in Their BOI Reports

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The Beneficial Ownership Information (BOI) Reporting Requirements introduced by FinCEN under the Corporate Transparency Act are projected to produce approximately 118,572,335 burden hours for reporting companies in Year 1.

These hours will fall to approximately 32,556,929 reporting companies, those of which exist before the effective date. These figures do not include the initial BOI reports for companies established on or after January 1, 2024.

If your company is obligated to comply to these new standards, it’s important to be aware of what information needs to be provided to FinCEN.

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Corporate Transparency Act Reporting Requirements

Reporting companies are required to provide specific information about themselves, their beneficial owners, and company applicants in their beneficial ownership information (BOI) reports. This insight article will outline the key details that reporting companies will need to provide to FinCEN.

Reporting Companies 

1. Full Legal Name

   Reporting companies must provide their complete legal name as it appears in their formation documents. This ensures accurate identification and proper tracking of the entity.

2. Trade Name or “Doing Business As” Name

   If the reporting company operates under a trade name or a “doing business as” name, it must be included in the BOI report. This additional information aids in identifying the entity beyond its legal name at formation.

3. Business Street Address

   The physical business address of the reporting company must be provided. P.O. boxes are not acceptable. For foreign companies, if their main address is located outside the U.S., they must report the U.S. address where they conduct their business within the country.

4. State or Tribal Jurisdiction

   Reporting companies created under the laws of a state or Indian tribe must disclose the specific jurisdiction where the company was formed. In the case of foreign companies, they need to report the foreign jurisdiction of incorporation and the jurisdiction where they were registered to conduct business within the United States.

5. IRS Taxpayer Identification Number (TIN/EIN)

   Reporting companies should provide their IRS-issued TIN or EIN. If a foreign corporation is not subject to tax filing in the U.S., a foreign taxpayer identification number, along with the originating jurisdiction are acceptable means of an identification number.

Beneficial Owners and Company Applicants

1. Full Legal Name

2. Date of Birth

3. Current Residential or Business Street Address

   Beneficial owners and company applicants must provide their current residential address. However, if the company applicant is involved in the business of corporate formation (such as an attorney or corporate formation agent) and submits the formation or registration document as part of their business activities, then they will provide the current street address of their business.

4. Unique Identifying Number

   Beneficial owners and company applicants are required to provide a unique identifying number from one of the following acceptable documents: a nonexpired U.S. passport, a nonexpired state, local, or Tribal identification document, a nonexpired state-issued driver’s license, or, if an individual lacks one of these documents, a nonexpired foreign passport.

5. Image of Identification Document

   Alongside the provided identifying number, an image of the identification document is required to corroborate the details provided. This helps ensure the accuracy and legitimacy of the information provided.

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Note: Company applicants are only required to file if the entity in question was created on or after January 1, 2024. Entities formed before this effective date are not obliged to report any company applicant information to FinCEN.

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Changes in Reported Information

The information provided in the initial BOI (CTA) report may require updates or modifications over time. If any changes occur in the reported information, reporting companies are required to promptly notify FinCEN. In such cases, reporting companies have a period of 30 days from the date of the change to submit the updated information.

These changes might include modifications to the beneficial ownership structure, alterations in beneficial owner details, or updates to the reporting company’s business address. Timely reporting of these changes ensures that FinCEN maintains accurate and up-to-date records. Note that changes in company applicant information do not need to be updated. Reporting company and beneficial owner information are the only parties that must report updates to their information listed above.

Updating the images of beneficial owners’ identification documents are required only when there are changes in numbers 1-4 of Beneficial Owners and Company Applicants reflected on the document. This means that reporting companies are not obligated to provide updated images of identification documents unless there are modifications to the beneficial owner’s full legal name, date of birth, current residential address, or unique identifying number.

To comply with the reporting deadline, reporting companies should establish internal processes and systems to identify any changes that trigger an obligation to report. Keeping track of significant events or updates within the organization will help ensure compliance and prevent any potential penalties or regulatory issues.

Are You Prepared to File?

For companies falling under the scope of these regulations, a comprehensive understanding of the required information is essential. Reporting companies must provide accurate and up-to-date details about themselves, their beneficial owners, and company applicants in their BOI reports. Beneficial owners and company applicants must provide their legal names, dates of birth, current residential or business addresses, and unique identifying numbers, as specified in 31 CFR 1010.380 By doing so, they can maintain compliance with the reporting deadline and prevent potential penalties.

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