Beneficial Ownership Information

In 2019, US Congress passed the Corporate Transparency Act which went into law in 2021 and requires most business entities (such as corporations, partnerships, and LLCs) which are not publicly traded to disclose their beneficial ownership according to rules to be promulgated by the Financial Crimes Enforcement Network (known as “FinCEN”).

The motivation was that small entities are sometimes used for nefarious purposes and so by making public beneficial ownership disclosures the misuse of these entities could be exposed.

Following the instructions of Congress, FinCEN in 2022 published regulations to set forth what and when information was to be provided by the affected entities. These entities must disclose the identities of all persons having beneficial ownership in these entities if such a person either “exercises substantial control” over the entity (such as is the Manager of an LLC) or owns at a least a 25 percent interest in the entity. The “when” is that a new entity formed in 2024 was to file its initial Beneficial Ownership Information (“BOI”) Report within 30 days of official formation — this has since been changed to 90 days — while entities created prior to 2024 have until January 1, 2025 to file their initial reports.

Clients of ExportAction are invited to seek additional information and assistance.