|There are plenty of reasons—some not even nefarious—why a company, foreign or domestic, might not want to tell the world who its owners are. And up until now, unless you happened to be a regulated entity, you didn’t have to disclose your ownership structure. But that is about to change. On January 1, 2024, a new regulation will take effect requiring a legal entity to report its beneficial ownership information (BOI) to the U.S. government.
Now, the rule only affects about 32.6 million companies, according to the Treasury Department. That includes corporations, limited liability companies, and certain partnerships and trusts. The new reporting regime, the first enacted under the Corporate Transparency Act (CTA), is intended to increase the transparency of ownership to help law enforcement and other agencies crack down on criminal schemes and illicit actors. Treasury Secretary Janet Yellen calls the rule “a major step forward in giving law enforcement, national security agencies, and other partners the information they need to crack down on criminals, corrupt individuals, and other bad actors.”
Published by Treasury’s Financial Crimes Enforcement Network (FinCEN), the new rule includes details about who must file a report, what information must be provided, and when a report is due, and FinCEN has issued a fact sheet identifying the rule’s key elements.