Beneficial Ownership Information Registry of the United States: An Emergence of a New Era in Transparency
The start of a new year marks an important turning point in the US campaign against financial crime. The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury has formally opened the portal to report beneficial ownership information as of January 1, 2024.
The nonpartisan Company Transparency Act (CTA), which was passed in 2021, which aims to peel back the curtain on corporate ownership and control while striking at the heart of illicit finance.
The Registry in Action
Treasury Secretary Janet L. Yellen hailed the introduction of the registry as a “historic step forward” in preserving the country’s economy and security.
The registry aims to eliminate the anonymity that has long protected corruption, drug trafficking, terrorism, and money laundering.
The United States is in a position to eliminate major gaps that have allowed complex company structures to serve as channels for illicit funding by creating a consolidated database.
Filing Requirements
Beneficial ownership data filing is now a simple, safe, and cost-free procedure.
The due dates for compliance are unambiguous:
- Existing Companies: File by January 1, 2025, if incorporated or registered prior to January 1, 2024.
- New Companies: You have 90 days from the date of creation or registration to file if your company was formed or registered after January 1, 2024.
Items Requiring Filing
CTA requires the following information from every beneficial owner:
- Name
- Date of birth
- Address
- Number and issuer identification from a formal document (US passport, US driver’s license, state/local/tribal ID, or foreign passport)
With the submission, an image of the identity document is required. Reporting firms are also required to submit their own data, such as names and addresses.
For businesses established on or after January 1, 2024, details regarding the founders of the business (referred to as “company applicants”) are also necessary.
Not Submitting an Annual Report
It’s crucial to understand that there is no obligation for yearly reporting. You only need to file a report for the first time or to update or modify data.
Resources for Compliance
FinCEN is committed to helping small companies comply with the new regulations. The FinCEN Small Entity Compliance Guide explains the requirements in clear language.
At www.fincen.gov/boi, filers can also access webinars, educational videos, a thorough FAQ, a contact center, and complete reporting instructions.
Conclusion
The U.S. Beneficial Ownership Information Registry’s creation represents a significant advancement in corporate transparency. It promises to give law enforcement a strong weapon to combat financial crime and level the playing field for law-abiding enterprises.
The integrity and security of the US financial system significantly improve when the system starts to gather data.
Both new and established businesses must now take the required actions to guarantee compliance with this revolutionary legislation, helping to create a more open and equitable business environment.