The Financial Crimes Enforcement Network, a bureau of the U.S. Department of Treasury has created a new rule called the Beneficial Ownership Information Reporting Rule. Starting Jan. 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them. Congress passed the Corporate Transparency Act in 2021, which created the new reporting requirement as part of the U.S. government’s efforts to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures,” according to the FAQ page.
Companies required to report beneficial ownership information will be domestic corporations, limited liability companies and any other entities created by the filing of a document with a secretary of state or any similar office in the United States as well as foreign companies, including corporations and limited liability companies, formed under the law of a foreign country that have registered to do business in the U.S. There are 23 types of entities that are exempt from the reporting requirement. A reporting company created or registered to do business before Jan. 1, 2024, will have until Jan. 1, 2025, to file its initial beneficial ownership information report. A reporting company created or registered on or after Jan. 1, 2024, will have 30 days to file its initial beneficial ownership information report.