Due within 90 calendar days of creation or registration

• Domestic Reporting Companies incorporated or formed after January 1, 2024
• Foreign Reporting Companies registered after January 1, 2024

Due by January 1, 2025

• Domestic Reporting Companies incorporated or formed before January 1, 2024
• Foreign Reporting Companies registered before January 1, 2024

Due within 30 calendar days of creation or registration

• Domestic Reporting Companies incorporated or formed on or after January 1, 2025

• Foreign Reporting Companies registered on or after January 1, 2025

Due within 30 calendar days of losing exemption

• Entities that no longer meet the criteria for any exemption must file an initial UBO report

• Each Reporting Company must identify its “beneficial owners” by providing their:
  • full legal name;
  • date of birth;
  • current residential street address; and
  • unique identifying number and the issuing jurisdiction from one of the following documents (including an image of such document): (i) non-expired passport; (ii) non-expired identification document issued by a State, local government, or Indian tribe; (iii) non-expired U.S. driver’s license; or (iv) if the individual does not have any of the above-mentioned documents, a non-expired passport issued by a foreign government; or
  • in lieu of all the above, a “FinCEN identifier” – a unique identifying number assigned by FinCEN to an individual.
• Additionally, for all new companies created or registered to do business in the United States on or after January 1, 2024, this information must be reported for each “Company Applicant,” which is the individual who (i) files an application to incorporate a corporation or form a limited liability company or other entity in the United States, (ii) who registers or files an application to register a foreign company to do business in the United States, and (iii) who is “primarily responsible for directing or controlling” such filing if more than one individual is involved in the filing of the document.

• FinCEN’s BOI Reporting Rule defines a “beneficial owner,” with respect to a Reporting Company, as any individual (i.e., one or more) who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise:
  • owns or controls at least 25% of the ownership interests of such Reporting Company; or
  • exercises “substantial control” over the Reporting Company.
• An individual exercises “substantial control” over a Reporting Company if the individual:
  • serves a senior officer of the Reporting Company (e.g., president, CEO, COO, CFO, general counsel and any other officer who performs a similar function regardless of title);
  • has authority over the appointment or removal of any senior officer or a majority of the board of directors (or similar body); or
  • directs, determines, or has substantial influence over important decisions made by the Reporting Company (i.e., sale or other transfer of principal assets, reorganization, dissolution, merger, major expenditures or investments, issuances of any equity, incurrence of any significant debt, approval of the operating budget, selection or termination of business lines or ventures or geographic focus, compensation schemes and incentive programs for senior officers, entering into or terminating significant contracts, or amendments of any substantial governance documents).

• FinCEN’s BOI Reporting Rule exempts from the definition of “beneficial owner” the following:
  • a minor child, as defined under the law of the State or Indian tribe in which a Reporting Company is created or registered, provided the Reporting Company reports the required information of a parent or legal guardian of the minor child;
  • an individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual;
  • an employee of a Reporting Company, acting solely as an employee, whose substantial control over or economic benefits from such entity are derived solely from the employment status of the employee, provided that such person is not a senior officer of the Reporting Company;
  • An individual whose only interest in a Reporting Company is a future interest through a right of inheritance; and
  • a creditor of a Reporting Company if the creditor satisfies the definition of “beneficial owner” solely through rights or interests for the payment of a predetermined sum of money, such as a debt incurred by the Reporting Company, or a loan covenant or other similar right associated with such right to receive payment that is intended to secure the right to receive payment or enhance the likelihood of repayment.

• FinCEN’s BOI Reporting Rule imposes BOI reporting requirements on Reporting Companies.
• “Reporting Company” is defined as a corporation, limited liability company, or other entity that is:
  • created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe; or
  • formed under the law of a foreign country and registered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.
• “State” is defined as any state of the U.S., the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, and any other commonwealth, territory, or possession of the United States.
• There are 23 types of entities that are exempt from reporting requirements.

• The CTA identifies BOI collected pursuant to the CTA as confidential, subject to disclosure only in limited circumstances.
• BOI reports submitted to FinCEN will be stored and maintained solely with FinCEN and will not be made publicly available nor made generally available to the States.
• The CTA expressly provides that BOI collected by FinCEN may only be used for:
  • Facilitating national security, intelligence, and law enforcement activities; and
  • Confirming BOI provided to financial institutions to facilitate AML compliance, with the consent of the Reporting Company.
• The CTA requires FinCEN to maintain BOI in a secure, nonpublic database, using information security methods and techniques appropriate to protect non-classified information systems at the highest security level; and to take all steps (including auditing) to ensure that government authorities access the information only for authorized purposes consistent with the CTA. FinCEN is developing the Beneficial Ownership Secure System (BOSS) to receive, store and maintain BOI.

• The CTA provides for civil and criminal penalties. Specifically, persons who:
  • willfully provide, or attempt to provide, false or fraudulent BOI, including a false or fraudulent identifying photograph or document to FinCEN; or
  • willfully fail to report complete or updated BOI to FinCEN;
  • will be subject to civil fines of no more than $500 for each day the violation continues and may be fined up to $10,000 and/or imprisoned for up to 2 years.
• Additionally, any person who knowingly discloses or knowingly uses the BOI obtained by the person through either a report submitted to FinCEN or a disclosure made by FinCEN pursuant to the CTA, shall be liable for fines of up to $500 each day the violation continues and may be fined up to $250,000 and/or imprisoned for not more than 5 years; or if while violating another U.S. law or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period, such person may be fined up to $500,000 and/or imprisoned for up to 10 years.
• Further, there is no indication in the language of the CTA that the federal government will consider any actions taken by a non-complying Reporting Company to be null and void based on the Reporting Company’s non-compliance with the CTA. Thus, the failure to comply with reporting requirements will not vitiate the formation of the applicable entity or prohibit a non-complying Reporting Company from conducting business or commencing action in federal court.