Corporate Transparency Act: Beneficial Ownership Reporting
Starting Jan. 1, 2024, many businesses will be required to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) to identify those who directly or indirectly own or control the company.
The National Defense Authorization Act for Fiscal Year 2021 enacted the Corporate Transparency Act (CTA) to require America’s small and independent businesses to file beneficial ownership information with FinCEN. The CTA helps the U.S. government identify money laundering, corruption, tax evasion, drug trafficking, fraud and other crimes. Congress passed the CTA to make it harder for these illegal activities and their perpetrators to hide from law enforcement officials.
Detailed information is available at fincen.gov/boi. Additionally, NAHB has provided answers to a select number of frequently asked questions listed below.
View a recording of the NAHB webinar "New Beneficial Ownership Requirements: What Small Business Owners Need to Know," featuring FinCEN‘s David King.
Note: The resources on this page will be updated as needed. Please check back regularly for the most up-to-date information.
The reporting requirements generally are applicable to corporations, limited liability companies (LLCs) and other similar entities that are created by the filing of a document with a secretary of state or a similar office under the law of a State or Indian Tribe. Foreign companies that have been registered to do business in any state or Tribal jurisdiction by filing a document with a secretary of state or a similar office of the state or Tribe may be a foreign reporting company.
Additionally, a reporting company is a corporation, LLC or other similar entity that:
- has 20 or fewer full-time employees; or
- filed Federal Income Taxes in the previous year demonstrating $5 million or less in gross receipts or sales; and
- do not otherwise qualify as an exempted entity as described in the regulations.
There are 23 types of entities exempt from the beneficial ownership reporting requirements. These entities include:
- publicly traded companies meeting specified requirements
- many nonprofits
- certain large operating companies
Click here to see a table summarizing the 23 exemptions.
A reporting company is required to provide specific information on the company itself, its beneficial owners, and the company applicant.
Reporting Company Information
The reporting company will need to submit the following information:
- Legal Name and DBA or other trade name under which it may do business
- Address of its principal place of business
- Jurisdiction in which it was formed or first registered, depending on whether it is a U.S. or foreign company
- Taxpayer Identification Number
Beneficial Owner Information
The beneficial owner is any individual who exercises substantial control over the reporting company or who owns or controls at least 25% of the reporting company.
- Legal name
- Birthdate
- Address (In most cases a home address)
- An identifying number from a driver’s license, passport or other approved document – along with an image of the document
Company Applicant Information
The company applicant is an individual who files the document that creates or registers the company. There may be up to two company applicants: 1) the individual who files the document that creates or first registers the reporting company, and 2) if there is a second individual involved in the filing of the document, the individual who is primarily responsible for directing or controlling that filing.
- Legal name
- Birthdate
- Address (In most cases a home address)
- An identifying number from a driver’s license, passport or other approved document – along with an image of the document
A company applicant does not need to be identified or reported if the company was registered or created before Jan. 1, 2024.
A reporting company created before Jan. 1, 2024 has until Jan. 1, 2025 to file its initial report with FinCEN.
If a reporting company is created in 2024, it has 90 days after receiving notice of its creation or registration to file its initial report.
Reporting companies created or registered on or after Jan. 1, 2025, will have 30 calendar days to file their initial beneficial ownership information reports after receiving actual or public notice of their creation or registration becoming effective.
There is no requirement for a reporting company to annually report beneficial ownership information. All reporting companies will be required to update and correct reports as necessary within 30 days of a change or when the company becomes aware of an error or inaccuracy.
The reports are filed electronically with FinCEN to a secure database created by FinCEN.
There are strict rules for who is authorized to access the beneficial ownership information in the database. FinCEN will permit federal, state, local and Tribal officials, as well as certain foreign officials, to submit a request for access to the information for purposes of activities related to national security, intelligence and law enforcement purposes. Financial institutions and their regulators also will have access to the information in certain circumstances with the permission of the reporting company.
