FDIC-Insured - Backed by the full faith and credit of the U.S. GovernmentBeneficial Ownership FAQs
Beneficial Ownership is a requirement of the U.S. Department of the Treasury. Here are a few frequently asked questions to help guide you. Please visit www.fincen.gov/boi for further information on the process and requirements.
Beneficial ownership information identifies individuals who directly or indirectly own or control a company.
The Corporate Transparency Act, passed in 2021, mandates reporting to prevent illicit gains through opaque ownership structures.
A beneficial owner exercises substantial control or owns at least 25% of a reporting company’s ownership interests.
There are five exceptions, relieving individuals from reporting as beneficial owners under certain circumstances. The Small Entity Compliance Guide includes a checklist to help determine whether any exceptions apply to individuals who might otherwise qualify as beneficial owners (see Chapter 2.4. “Who qualifies for an exception from the beneficial owner definition?”).
Typically, accountants and lawyers are not beneficial owners, but it depends on their role. General services usually don’t qualify, but general counsel may be considered a beneficial owner as a “senior officer” of the company.
FinCEN is working to raise awareness of reporting obligations. Correcting errors within 90 days of the original report deadline may prevent penalties. Failure to report or update could result in civil and criminal penalties.
A “FinCEN identifier” is a unique number issued by FinCEN to an individual or reporting company upon request after specific information is provided. Each individual or company can have only one FinCEN identifier.
Individuals can request a FinCEN identifier beginning January 1, 2024, by completing an electronic web form with their full legal name, date of birth, address, unique identifying number, an acceptable identification document, and an image of that document. Reporting companies can request a FinCEN identifier by checking a box on the beneficial ownership information report. They’ll receive the identifier immediately. If a company needs to request a FinCEN identifier after submitting its initial report, they can do so by submitting an updated beneficial ownership information report.
FinCEN is actively exploring options to allow individuals to deactivate a FinCEN identifier to avoid ongoing updates. Further guidance on this will be provided once the process is completed.
Yes, reporting companies can enlist third-party service providers to submit beneficial ownership information reports. These providers can submit reports through FinCEN’s E-Filing system and/or an Application Programming Interface (API). Technical specifications for the API will be available at a later date.
