The Corporate Transparency Act, effective January 1, 2024, requires most small businesses registered as LLCs, corporations, or similar entities to file a Beneficial Ownership Information report with the Financial Crimes Enforcement Network (FinCEN). This is a new obligation that many small business owners are not yet aware of.
Who Must File
Most LLCs, corporations, and similar entities formed in the U.S. or registered to do business in the U.S. must file. There are 23 exemptions, including large operating companies with more than 20 full-time employees and $5M in U.S.-sourced revenue. Most small businesses do not qualify for an exemption.
What to Report
For each beneficial owner—any individual who owns 25% or more of the company or exercises substantial control—you must report their full legal name, date of birth, current residential address, and an identifying document number (driver's license or passport) along with an image of that document.
Deadlines and Penalties
Companies formed before January 1, 2024 had until January 1, 2025 to file. Companies formed after January 1, 2024 must file within 90 days of formation. Willful violations carry penalties of up to $500 per day and criminal penalties of up to $10,000 and two years in prison. File promptly if you have not already.
Key Takeaways
- Most LLCs and corporations must file BOI reports—check FinCEN's website to confirm your status.
- Beneficial owners are those with 25%+ ownership or substantial control.
- Willful non-filing carries $500/day civil penalties and criminal exposure.
