Important Corporate Transparency Act Law Update: U.S. Beneficial Ownership Information Filing System is Now Open

January 10, 2024

New federal reporting requirement that may affect your business is now effective.

The Corporate Transparency Act (the CTA) is officially in effect. You should confirm now whether your company has any reporting obligations.

The CTA requires certain entities to report their beneficial ownership information (BOI). On January 1, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) began accepting BOI reports through its online filing system. These reports identify the individuals who ultimately own or control a company. FinCEN expects that about 32 million businesses will need to report, many of which will be smaller, privately held businesses not heavily regulated by other governmental agencies.

KJK’s Corporate & Securities team has been closely following the rollout of the CTA and can determine whether your company needs to file a BOI report, help identify your beneficial owners, guide you through the reporting process, and assist with filings.

Here’s What You Should Know

Who Files a BOI Report?

  • Reporting companies must file a BOI report. Your company may be a reporting company if it is a corporation, limited liability company, or other company created in the United States by filing a document with a secretary of state or similar office, or if it is a foreign company registered to do business in the U.S.

What are the Reporting Deadlines?

  • Existing companies: January 1, 2025, is the deadline for reporting companies created or registered before January 1, 2024.
  • Newly created or registered companies: For reporting companies created or registered in 2024, the deadline is 90 calendar days after receiving actual or public notice that their company’s creation or registration is effective.

Who is Exempt from Reporting?

  • FinCEN has identified 23 types of entities that are exempt from the BOI reporting requirements.
  • Examples of exempt entities include publicly traded companies and nonprofits.
  • Another instance of an exempt entity includes certain large operating companies (defined as more than 20 employees, gross revenue is excess of $5 million and US presence).

What are the Reporting Requirements?

Reporting companies need to report certain information on itself and its beneficial owners. Beneficial owners are those that own or control at least 25% of the ownership interests of a reporting  company or exercise substantial control over the reporting company.

A BOI report must identify the reporting company’s:

  • Full legal name
  • Trade name
  • Current address
  • State or jurisdiction of formation
  • Federal taxpayer identification number (FEIN)

A BOI report must also identify a beneficial owner’s:

  • Full legal name
  • Date of birth
  • Current address
  • Drivers’ license or passport number (and a picture of the same)

Next Steps

Failure to comply with the BOI reporting requirements can lead to significant penalties.

Please contact Alex Jones (AEJ@kjk.com; 216.736.7241) or Samantha Cira (SMC@kjk.com; 216.736.7232) for assistance with preparing and filing BOI reports for your company.