In an effort to prevent shell corporations from committing financial crimes, Congress enacted the Corporate Transparency Act (CTA) on January 1, 2021. The CTA requires small businesses created in the United States before January 1, 2024, to file a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) before January 1, 2025. Additionally, companies created or registered in 2024 have 90 days to file their BOI report with FinCEN after receiving notice that their company’s creation or registration is effective. Although there are 23 types of entities that are exempt from filing a BOI report including certain types of banks, insurance companies and Commodity Exchange Act registered entities. LLCs, SMLLCs, Limited Partnerships, S Corporations and C Corporations are all required to file a BOI report unless otherwise exempt. Although a BOI report is only required to be filed once, after January 1, 2025, both new reporting companies, and existing companies hoping to update or change their initial BOI report have 30 days to file with FinCEN. BOI reports must be filed online at the FinCEN BOI E-Filing System Portal before January 1, 2025, for entities created before January 1, 2024. 

Companies required to file a BOI report are generally required to provide general information about each beneficial owner of the entity, including names, dates of birth, addresses and state identification numbers. Additionally, each entity is required to submit information about itself, including their legal name and complete address, along with the jurisdiction in which the entity was first formed or registered, and the entity’s taxpayer identification number (TIN). 

Business owners who formed or registered their entity before January 1, 2024, have until January 1, 2025, to submit their BOI report to FinCEN. Companies who fail to file or update their BOI report may be subject to penalties of up to $500 for each day that the violation continues. For more information on filing requirements or exemptions from filing a BOI report to FinCEN, please visit FinCEN's Small Entity Compliance Guide or Iowa State University’s Center for Agricultural Law and Taxation’s reporting update for more information.