On January 1, 2024, the new Beneficial Ownership Information (BOI) reporting requirements under the U.S. Corporate Transparency Act (CTA) took effect. For the first time, many U.S. companies—including U.S. subsidiaries of UK and other European companies—may be required to affirmatively disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), the anti-money laundering arm of the U.S. Treasury Department.

To avoid potential civil and criminal penalties resulting from noncompliance, every business entity formed or registered in the U.S. should contact its attorneys to determine whether it is required to file a report under these new BOI reporting requirements.

1) Who Must Report?

These BOI reporting requirements apply to domestic and foreign “Reporting Companies.” “Domestic Reporting Companies” are corporations, limited liability companies, and other entities created by filing a document with a secretary of state or similar office under state or tribal law. “Foreign Reporting Companies” are corporations, limited liability companies, and other entities formed under the laws of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or other similar office under state law or tribal law.

Most U.S. subsidiaries of UK and other European parent companies (unless exempt) will be considered “Domestic Reporting Companies” and thus required to report their BOI. Foreign parent companies registered to do business in the U.S. may be considered “Foreign Reporting Companies” and thus required to file as well.

There are 23 types of businesses which are expressly excluded from the definition of a “Reporting Company” (and which, as a practical matter, are exempt from these BOI reporting requirements). Many of these exemptions apply to entities in regulated industries, such as banks, credit unions, depository institution holding companies, broker-dealers, investment advisers, venture capital fund advisers, investment companies, pooled investment vehicles, and money services businesses. One key exemption is for “Large Operating Companies,” which are entities that:

• employ more than 20 full-time employees in the U.S.;
• reported more than $5,000,000 in gross receipts or sales to the U.S. Internal Revenue Service (IRS) in the previous year (excluding gross receipts or sales from sources outside the U.S.); and
• have an operating presence at a physical office within the U.S.

2) When Must a Report Be Filed?

Reporting Companies created or registered before January 1, 2024 have until January 1, 2025 to file their initial BOI report. Reporting Companies created or registered in 2024 will have 90 calendar days after creation or registration, as applicable, to file their initial BOI report. Reporting Companies created or registered on or after January 1, 2025 will have only 30 calendar days after creation or registration, as applicable, to file their initial BOI report.

3) What Information Must Be Reported?

Each Reporting Company is required to disclose in its initial BOI report the following information about itself:

• its full legal name;
• any trade name or d/b/a name;
• the current street address of its principal place of business in the U.S., where applicable, and in all other cases the current street address of its primary U.S. location;
• the state, tribal, or foreign jurisdiction of formation;
• for Foreign Reporting Companies, the state or tribal jurisdiction where the company is registered; and
• its IRS Taxpayer Identification Number (TIN).

Reporting Companies must also include information in their initial BOI report 1) for each “Beneficial Owner,” and 2) for newly formed companies, no more than two “Company Applicants.” A “Beneficial Owner” is, subject to certain exceptions, any individual who, directly or indirectly, either:

• exercises “substantial control” over the Reporting Company; and/or
• owns or controls at least 25 percent of the ownership interests of the Reporting Company.

A “Company Applicant” is:

• the individual who directly files the document that creates or registers the Reporting Company; and
• if more than one person is involved in filing the document that creates or registers the Reporting Company, the individual who is primarily responsible for directing or controlling that filing.

Company Applicant information is not required for Reporting Companies created or registered before January 1, 2024.

Each Beneficial Owner or Company Applicant is required to provide the following information to the Reporting Company to be included in its BOI report:

• their full legal name;
• their date of birth;
• their current residential address (Company Applicants may use their business address if they created or registered the Reporting Company in their regular course of business);
• a unique identifying number, and the issuing jurisdiction, from a nonexpired government issued identification document; and
• an image of that identification document showing its unique identifying number.

4) Additional Information

Reporting Companies will have an ongoing responsibility to file “updated reports” whenever there is any change in the required information previously submitted to FinCEN (e.g., if the Reporting Company changes its address). Reporting Companies will have only 30 days from the date of such change to file an updated report. Additionally, Reporting Companies must file a “corrected report” within 30 days of becoming aware that any previously filed report contains inaccurate information.

FinCEN has stated that the ultimate responsibility for compliance with these new BOI reporting requirements, including the ongoing obligation to file updated and corrected reports, lies with the Reporting Company. Therefore, it is important to contact your attorneys to discuss whether these new BOI reporting requirements apply to your company and how best to comply.