Implementation of the Corporate Transparency Act (CTA)[1] is gathering momentum. Most notably, as of the new year the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) is accepting reports of beneficial ownership information (BOI) from companies through its BOI E-Filing System

We compare the key requirements of the Beneficial Ownership Rule and BOI Reporting Rule side by side in this chart, with material differences between the analogous requirements highlighted. 

Below we highlight certain important aspects of the BOI collection and reporting regime, which are critical parts of CTA compliance:

Reporting companies formed on or after January 1, 2024, must report their BOI to FinCEN within 90 days, while existing reporting companies have until January 1, 2025, to file their BOI report (BOIR). The BOI reporting requirements generally apply to companies domiciled or doing business in the United States (with the exceptions noted below). The existing and independent obligation of banks to collect and verify beneficial ownership information under the Beneficial Ownership Rule currently remains in place as-is; however, as part of the reforms mandated by the CTA, Treasury is directed to revise the Beneficial Ownership Rule to: (1) bring it into conformance with the BOIR Rule; (2) account for the access of financial institutions to BOIR in order to confirm the beneficial ownership information provided directly to the financial institutions; and (3) reduce any burdens on financial institutions and legal entity customers that are unnecessary or duplicative in light of the BOIR database. Based on the CTA mandate, it appears that financial institutions may still be required to collect beneficial ownership information from legal entity customers under the revised Beneficial Ownership Rule but may be able to rely on the BOI database to verify such information. The Beneficial Ownership Rule revision, which is expected to be proposed and finalized in 2024, will complete the three elements of the BOI Reporting Rule mandated by the CTA, the first two rules (BOI reporting and BOI access and safeguarding) having been finalized in 2022 and 2023, respectively.

We will continue to monitor FinCEN's implementation of the CTA and report any further developments.

[1] Sections 6401-6403 of the Anti-Money Laundering Act of 2020.