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Beneficial Ownership Reporting Requirement

Beneficial Ownership Reporting Requirements - What you Need to Know

Effective January 1, 2024, under the Corporate Transparency Act (“CTA”), most small businesses are required to report beneficial ownership information to the Financial Crimes Enforcement Network (“FinCEN”) in an effort to combat money laundering and other illegal activity.  

What is a Beneficial Owner?

A "beneficial owner" is defined as any individual who, either directly or indirectly exercises substantial control over a reporting company, and/or controls at least 25% of the reporting company’s ownership interests. Information required to be reported includes personal data regarding the Company, its beneficial owners and the applicant who is filing the report. 

 Who Must File?

Most small businesses will be required to file, with minor exception - a few such exceptions include non-profit organizations and "Large operating entities" (businesses with > 20 full-time US employees, > $5M of US gross receipts reported on their previous year tax return and have an operating presence at a physical location in the US).

Companies formed DURING calendar year 2024 MUST file within 90 days of formation. Companies formed before 1/1/2024 have until 1/1/2025 to file. For entities already in existence as of January 1, 2024, we recommend filing later in the year to await further developments from existing legal challenges surrounding this CTA reporting. Below is the link where the report can be completed:

If your business was formed during 2024, we recommend addressing this requirement immediately. BSC would be happy to address any questions or concerns about the form or provide competent legal counsel references as needed. As always, we gratefully accept new referrals seeking guidance on the matter as well.