Beneficial Ownership Information Reference Guide
Effective January 1, 2024, Federal law — the Corporate Transparency Act (CTA) — requires certain entities, including many small businesses, to report information about the individuals who ultimately own or control them (also known as their “beneficial owners”) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. A separate regulatory requirement currently requires many financial institutions to also collect beneficial ownership information from certain customers that seek to open accounts as part of Federal customer due diligence requirements.
The CTA’s requirement that entities report information to FinCEN enables FinCEN to supply that information to law
enforcement and other government agencies, as well as certain financial institutions. Agencies and institutions authorized to receive this information may then use it for a several specified purposes, most significantly combatting money laundering and other illicit activities that involve shell companies. Beneficial ownership collection requirements for financial institutions, in contrast, are primarily intended to ensure that financial institutions know their customers and thus can prevent their institutions from being used to facilitate illicit activity.
The guide answers key questions about these two separate requirements:
(1) reporting beneficial ownership information to FinCEN under the CTA; and
(2) providing beneficial ownership information to financial institutions in connection with Federal customer due diligence requirements.
Additional information about these requirements can be found in the Resources section.
Will an entity potentially have to provide beneficial ownership information to both FinCEN and a financial institution?
Yes. FinCEN and financial institutions both collect beneficial ownership information from entities. However, they collect that information for different reasons and, in some cases, may collect different types of information. If an entity is required to report beneficial ownership information to FinCEN, that requirement cannot be fulfilled by providing beneficial ownership information to a financial institution. For example, if an entity seeks to open an account at a bank, the bank may be required to request certain information about the entity’s beneficial owner(s) before the account can be opened. That information is collected by the bank, not by FinCEN, when fulfilling its Federal customer due diligence obligations. That same entity may separately be a “reporting company” under the CTA that is required to report beneficial ownership information to FinCEN. Additional information about the requirements for entities to report beneficial ownership information to FinCEN, including exemptions, can be found at www.fincen.gov/boi.
Are FinCEN and financial institutions collecting the exact same beneficial ownership information?
No. The two charts in the guide compare the requirements.
FinCEN and financial institutions do not collect the exact same types of beneficial ownership information. For example, financial institutions are required to collect social security numbers of beneficial owners, but social security numbers are not required to be reported to FinCEN.
FinCEN began accepting beneficial ownership reports pursuant to the CTA on January 1, 2024.
• If your company was created or registered prior to January 1, 2024, you have until January 1, 2025, to report.
• If your company is created or registered in 2024, you must report within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
• If your company is created or registered on or after January 1, 2025, you must report within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
• Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 calendar days
Source: Beneficial Ownership Information Reporting | FinCEN.gov