Effective January 1, 2024, the Corporate Transparency Act (CTA) requires most business entities to file an initial report with the Financial Crimes Enforcement Network (FinCEN) to disclose the entity’s beneficial owners (a “BOI Report”). Entities that existed before January 1, 2024, have until January 1, 2025, to comply.

This new rule requires reporting companies to file reports with FinCEN that identify two categories of individuals: (1) the beneficial owners of the entity; and (2) the company applicants of the entity. Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information.

The rule will enhance the ability of FinCEN and other agencies to protect U.S. national security and the U.S. financial system from illicit use and provide essential information to national security, intelligence, and law enforcement agencies; state, local, and Tribal officials; and financial institutions to help prevent drug traffickers, fraudsters, corrupt actors such as oligarchs, and proliferators from laundering or hiding money and other assets in the United States.