The Corporate Transparency Act (the “CTA”) imposes a new reporting requirement on certain entities (“reporting companies”) to file reports with the Financial Crimes Enforcement Network (“FinCEN”) that identify the reporting companies’ beneficial owners and in certain cases, the individual who directly filed the document with specified governmental authorities that created the entity or registered it to do business, as well as the individual who was primarily responsible for directing or controlling such filing, if more than one individual was involved in the filing of the document (“company applicants”).[4] The reports are to be filed electronically through an online interface. The report must also contain information about the reporting company. The reporting company must certify that the report is true, correct, and complete. The CTA also requires that reporting companies update the information in their reports as needed, and correct any previous incorrectly reported information, within specific timeframes.
Almost all entities the exist now and those formed in the future in the U.S. are reporting companies. See the list of 23 types of entities that are not subject to the CTA (the “exempt entities“).
FinCEN’s Estimated Number of Reporting Companies
FinCEN estimates that 32,556,929 entities will submit initial BOI reports in 2024.[8] In 2025 and beyond, FinCEN estimates that the number of initial BOI reports filed will be 4,998,468 per year, which is the same estimate as the number of new entities per year that meet the definition of reporting company and are not exempt.[9] The total five-year average of expected BOI initial reports is 10,510,160. In order to estimate the total burden hours and costs associated with the reporting requirement, FinCEN further assesses a distribution of the reporting companies’ beneficial ownership structure. FinCEN assumes that:
- 59 percent of reporting companies will have a simple structure ( i.e., 1 beneficial owner who is also the company applicant),
- 36.1 percent will have an intermediate structure ( i.e., 4 beneficial owners and 1 company applicant), and
- 4.9 percent will have a complex structure ( i.e., 8 beneficial owners and 2 company applicants).
FinCEN estimates that 6,578,732 updated BOI reports will be filed in 2024, and 14,456,452 such reports will be filed annually in 2025) and beyond.[10] The total five-year average of expected BOI update reports is 12,880,908.
FinCEN’s Estimated Completion Time per Reporting Company
FinCEN estimates the average burden of preparing and filing a BOI report as:
- 90 minutes per response for reporting companies with simple beneficial ownership structures (40 minutes to read the form and understand the requirement, 30 minutes to identify and collect information about beneficial owners and company applicants, and 20 minutes to fill out and file the report, including attaching an image of an acceptable identification document for each beneficial owner and company applicant).
- 650 minutes per response for reporting companies with complex beneficial ownership structures (300 minutes to read the form and understand the requirement, 240 minutes to identify and collect information about beneficial owners and company applicants, and 110 minutes to fill out and file the report, including attaching an image of an acceptable identification document for each beneficial owner and company applicant).
FinCEN’s Estimated Cost to Prepare the Report per Reporting Company
FinCEN estimates the average cost of filing an initial BOI report per reporting company to be a range of $85.14 for entities with simple beneficial ownership structures to $2,614.87 for entities with complex beneficial ownership structures.[17] FinCEN estimates the average cost of filing an updated BOI report per reporting company to be $37.84 to $560.81.[18]
Beneficial Ownership Information (BOI) Report Summary of Data Fields
The text below is what must be input into FinCEN’s online BOI reports.
Note:
Lines that must be filled in for a report to be accepted are identified with the * symbol next to the line number. Italicized text provides a description and/or explanation of lines and response options for purposes of this PRA notice.
BOI Report Filing Information
1. * Type of filing (check only one box for lines 1a-1d)
a. Initial report
b. Correct prior report (if this box is checked, then you must fill out lines 1e-1h (Reporting Company information associated with most recent report))
c. Update prior report (if this box is checked, then you must fill out lines 1e-1h (Reporting Company information associated with most recent report))
d. New exempt entity (if this box is checked, then you must fill out lines 1e-1h (Reporting Company information associated with most recent report) and no other lines in the report)
Reporting Company information associated with most recent report, if any: (Lines 1e-1h must be filled out when the type of filing is “Correct prior report” (line 1b), “Update prior report” (line 1c), or “Newly exempt entity” (line 1d) in order to link the new filing to the previous filing)
e. Legal name
f. Tax identification type (select one from list of options)
EIN
SSN/ITIN
Foreign
g. Tax identification number
h. Country/Jurisdiction (if foreign tax ID only) (select from list of countries/jurisdictions)
2. Date prepared (assigned automatically when filer finalizes report) ( line 2 populates automatically with the date when the filer selects “Finalize” on the form)
Part I. Reporting Company Information
3. Request to receive FinCEN Identifier (FinCEN ID) (check the box to receive a FinCEN ID)
4. Foreign pooled investment vehicle (check the box if Reporting Company is a foreign pooled investment vehicle)
Full legal name and alternate name(s):
5. * Reporting Company legal name
6. Alternate name ( e.g., trade name, DBA) (multiple alternate names may be reported)
Form of identification:
7. * Tax identification type (select one from list of options)
EIN
SSN/ITIN
Foreign
8. * Tax identification number
9. Country/Jurisdiction (if foreign tax ID only) (select from list of countries/jurisdictions)
Jurisdiction of formation or first registration:
10. *
a. Country/Jurisdiction of formation (select from list of countries/jurisdictions, including the United States, each U.S. Territory,[28] and all foreign countries. If United States is selected, complete lines 10b, 10c, or 10d as applicable; if a U.S. Territory is selected, line 10b populates automatically with the selected U.S. Territory; if a foreign country is selected, complete lines 10e, 10f, or 10g as applicable.)
Domestic Reporting Company:
b. State of formation (select from list of U.S. States; if a U.S. Territory is selected in line 10a, line 10b populates automatically with the selected U.S. Territory)
c. Tribal jurisdiction of formation (select from list of Tribes and “Other Tribe”)
d. Name of other Tribe (enter name of other Tribe not included in list for line 10c, only available if “Other Tribe” selected in line 10c)
Foreign Reporting Company:
e. State of first registration (select from list of U.S. States and U.S. Territories)
f. Tribal jurisdiction of first registration (select from list of Tribes and “Other Tribe”)
g. Name of other Tribe (enter name of other Tribe not included in list for line 10f, only available if “Other Tribe” selected in line 10f)
Current U.S. address:
11. * Address (number, street, and apt. or suite no.)
12. * City
13. * U.S. or U.S Territory
14. * State (select from list of U.S. States; if a U.S. Territory is selected in line 13, line 14 populates automatically with the selected U.S. Territory)
15. * ZIP Code
16. Existing Reporting Company (check if Reporting Company was created or registered before January 1, 2024) (if this box is checked, then Company Applicant information is not required)
Part II. Company Applicant Information (report up to two Company Applicants, lines 18-33 are repeated for each Company Applicant)
17. Unable to identify all Company Applicants (check if you are unable to obtain any required information about one or more Company Applicants)
Company Applicant FinCEN ID:
18. FinCEN ID (if FinCEN Identifier is not provided, information about the Company Applicant must be provided in the lines below)
Full legal name:
19. * Individual’s last name
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
20. * First name
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
21. Middle name (required if the Company Applicant has a middle name)
22. Suffix (required if the Company Applicant’s name has a suffix)
Date of birth:
23. * Date of birth
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
Current address:
24. * Address type (check the appropriate box for lines 24a, 24b, or 24z)
a. Business address
b. Residential address
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
25. * Address (number, street, and apt. or suite no.)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
26. * City
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
27. * Country/Jurisdiction (select from list of countries/jurisdictions)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
28. * State (select from list when United States, Canada, or Mexico is the country/jurisdiction selected in line 27; if a U.S. Territory is the country/jurisdiction selected in line 27, line 28 populates automatically with the selected U.S. Territory; if a foreign country is the country/jurisdiction selected in line 45, line 46 remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
29. * ZIP/Foreign postal code
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
Form of identification and issuing jurisdiction:
30. * Identifying document type (select one from list of lines 30a-30d or check box 30z)
a. State-issued driver’s license
b. State/local/Tribe-issued ID
c. U.S. passport
d. Foreign passport
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
31. * Identifying document number
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
32. * Identifying document issuing jurisdiction (select country/jurisdiction in line 32a or checkbox 32z, and complete lines 32b-32d if applicable)
a. Country/Jurisdiction (select from list of countries/jurisdictions)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
b. State (select from list when the United States is the country/jurisdiction selected in line 32a and the identifying document is issued by a State; if a U.S. Territory is the country/jurisdiction selected in line 32a, line 32b populates automatically with the selected U.S. Territory; if a foreign country is the country/jurisdiction selected in line 32a, line 32b remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
c. Local/Tribal (select from list when the United States is the country/jurisdiction selected in line 32a and the identifying document is issued by a local jurisdiction or Tribe; if local jurisdiction or Tribe is not included in list, select “Other” and go to line 32d; if a U.S. territory or foreign country is the country/jurisdiction selected in line 32a, line 32c remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
d. Other local/Tribal name (only available if “Other” selected in line 32c; enter name of local jurisdiction or Tribe that was not included in the list for line 32c)
33. * Identifying document image (attach image of identifying document referred to in lines 31-33) (instructions on upload process will be provided here)
a. Unknown (check the box if you are not able to obtain this information about the Company Applicant)
Part III. Beneficial Owner Information (multiple Beneficial Owners may be reported, lines 35-51 are repeated for each Beneficial Owner)
34. Unable to identify all Beneficial Owners (check if you are unable to obtain any required information on one or more Beneficial Owners)
35. Parent/Guardian information instead of minor child (check if the Beneficial Owner is a minor child and the parent/guardian information is provided instead)
Beneficial Owner FinCEN ID:
36. FinCEN ID (if FinCEN Identifier is not provided, information about the Beneficial Owner must be provided in the lines below)
Exempt entity:
37. Exempt entity (check the box when an exempt entity is being reported in lieu of a Beneficial Owner’s information; if checked, provide the legal name of the exempt entity in line 38, and lines 39-41 are grayed out)
Full legal name:
38. * Individual’s last name (or Exempt entity’s legal name if line 37 box is checked
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
39. * First name
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
40. Middle name (required if the Beneficial Owner has a middle name)
41. Suffix (required if the Beneficial Owner’s name has a suffix)
Date of birth:
42. * Date of birth
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
Residential address:
43. * Address (number, street, and apt. or suite no.)
z. Unknown ( check the box if you are not able to obtain this information about the Beneficial Owner)
44. * City
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
45. * Country/Jurisdiction (select from list of countries/jurisdictions)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
46. * State (select from list when United States, Canada, or Mexico is the country/jurisdiction selected in line 45; if a U.S. Territory is the country/jurisdiction selected in line 45, line 46 populates automatically with the selected U.S. Territory; if a foreign country is the country/jurisdiction selected in line 45, line 46 remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
47. * ZIP/Foreign postal code
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
Form of identification and issuing jurisdiction:
48. * Identifying document type (select one from list of lines 48a-48d or checkbox 48z)
a. State-issued driver’s license
b. State/local/Tribe-issued ID
c. U.S. passport
d. Foreign passport
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
49. * Identifying document number
z. Unknown ( check the box if you are not able to obtain this information about the Beneficial Owner)
50. * Identifying document issuing jurisdiction (select country/jurisdiction in line 50a or checkbox 50z, and complete lines 50b-50d if applicable)
a. Country/Jurisdiction (select from list of countries/jurisdictions)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
b. State (select from list when the United States is the country/jurisdiction selected in line 50a and the identifying document is issued by a State; if a U.S. Territory is the country/jurisdiction selected in line 50a, line 50b populates automatically with the selected U.S. Territory; if a foreign country is the country/jurisdiction selected in line 50a, line 50b remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
c. Local/Tribal (select from list when the United States is the country/jurisdiction selected in line 50a and the identifying document is issued by a local jurisdiction or Tribe (if local jurisdiction or Tribe is not included in the list, select “Other” and go to line 50d); if a U.S. Territory or foreign country is the country/jurisdiction selected in line 50a, line 50c remains empty)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
d. Other local/Tribal name (only available if “Other” selected in line 50c; enter name of local jurisdiction or Tribe that was not included in list for line 50c)
51. * Identifying document image (attach image of identifying document referred to in in lines 48-50) (instructions on upload process will be provided here)
z. Unknown (check the box if you are not able to obtain this information about the Beneficial Owner)
Footnotes
1. 87 FR 59498 (Sept. 30, 2022).
2. Specifically, the CTA is Title LXIV of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law 116-283 (Jan. 1, 2021). Division F of the NDAA is the Anti-Money Laundering Act of 2020, which includes the CTA. Section 6403 of the CTA, among other things, amends the Bank Secrecy Act (BSA) by adding a new section 5336, Beneficial Ownership Information Reporting Requirements, to subchapter II of chapter 53 of title 31, United States Code.
4. 31 U.S.C. 5336(b) and 31 CFR 1010.380(b).
5. See31 CFR 1010.380(c)(2).
6. See31 CFR 1010.380(b)(2)(iii). The special reporting rule for foreign pooled investment vehicle specifies that, “[i]f more than one individual exercises substantial control over the entity, the entity shall report information with respect to the individual who has the greatest authority over the strategic management of the entity.”
7. Refer to the final BOI reporting rule RIA for a detailed description of these estimates. See87 FR 59589 (Sept. 30, 2022).
8. Refer to the final BOI reporting rule RIA cost analysis for the underlying sources and analysis related to this estimate. See87 FR 59562-59579 (Sept. 30, 2022).
9. Refer to the final BOI reporting rule RIA cost analysis for the underlying sources and analysis related to this estimate. As noted therein, for analysis purposes FinCEN assumes that the number of new entities per year from years 2 through 10 (2025 to 2033) will be the same as the 2024 new entity estimate, which accounts for a growth factor of 13.1 percent per year from the date of the underlying source (2020) through 2024. Annually thereafter, FinCEN assumes no change in the number of new entities. FinCEN provides an alternative cost analysis in the conclusion section where the 13.1 percent growth factor continues throughout the entire 10-year time horizon of the analysis ( i.e., through 2033). However, this growth factor is possibly an overestimate given that it is a based on a relatively narrow timeframe of data (two years). See87 FR 59562-59579 (Sept. 30, 2022).
10. Refer to the final BOI reporting rule RIA cost analysis for the underlying sources and analysis related to these estimates. See87 FR 59562-59579 (Sept. 30, 2022).
11. For BOI reports, there is an initial filing and subsequent filings; the latter are required as information changes or if previously reported information was incorrect.
12. 86 FR 69920 (Dec. 8, 2021).
13. ((0.59 × 32,556,929) × (90/60)) + ((0.361 × 32,556,929) × (370/60)) + ((0.049 × 32,556,929) × (650/60)) = 118,572,335.
14. ((0.59 × 4,998,468) × (90/60)) + ((0.361 × 4,998,468) × (370/60)) + ((0.049 × 4,998,468) × (650/60)) = 18,204,421.
15. ((0.59 × 6,578,732) × (40/60)) + ((0.361 × 6,578,732) × (105/60)) + ((0.049 × 6,578,732) × (170/60)) = 7,657,096.
16. ((0.59 × 14,456,452) × (40/60)) + ((0.361 × 14,456,452) × (105/60)) + ((0.049 × 14,456,452) × (170/60)) = 16,826,105.
17. (90/60) × $56.76 = $85.14 and ((650/60) × $56.76) + $2,000 = $2,614.87.
18. (40/60) × $56.76 = $37.84 and ((170/60) × $56.76) + $400 = $560.81.
19. (32,556,929 × $85.14) = $2,771,769,963.58 and (32,556,929 × $2,614.87) = $85,132,196,638.53.
20. ((0.59 × 32,556,929) × $85.14) + ((0.361 × 32,556,929) × $1,350.00) + ((0.049 × 32,556,929) × $2,614.87) = $21,673,487,885.48.
21. (4,998,468 × $85.14) = $425,550,075.79 and (4,998,468 × $2,614.87) = $13,070,353,315.07.
22. ((0.59 × 4,998,468) × $85.14) + ((0.361 × 4,998,468) × $1,350.00) + ((0.049 × 4,998,468) × $2,614.87) = $3,327,532,419.21
23. FinCEN assumes that each reporting company will make one initial BOI report. Given the implementation period of one year to comply with the rule for entities that were formed or registered prior to the effective date of the final BOI reporting rule, FinCEN assumes that all the entities that meet the definition of reporting company will submit their initial BOI reports in Year 1 (2024), totaling 32.6 million reports. Additionally, FinCEN has applied a 6.83 percent growth factor each year since the date of the underlying source (2020) to account for the creation of new entities. For analysis purposes, FinCEN assumes that the number of new entities per year from years 2 through 10 (2025 to 2033) will be the same as the 2024 new entity estimate, which accounts for a growth factor of 13.1 percent per year from the date of the underlying source (2020) through 2024. Annually thereafter, FinCEN assumes no change in the number of new entities. FinCEN provides an alternative cost analysis in the conclusion section where the 13.1 percent growth factor continues throughout the entire 10-year time horizon of the analysis ( i.e., through 2033). However, this growth factor is possibly an overestimate given that it is a based on a relatively narrow timeframe of data (two years).
24. (6,578,732 × $37.84) = $248,927,811.14 and (6,578,732 × $560.81) = $3,689,435,948.74.
25. ((0.59 × 6,578,732) × $37.84) + ((0.361 × 6,578,732) × $299.33) + ((0.049 × 6,578,732) × $560.81) = $1,038,524,428.72.
26. (14,456,452 × $37.84) = $547,007,086.12 and (14,456,452 × $560.81) = $8,107,360,919.04.
27. ((0.59 × 14,456,452) × $37.84) + ((0.361 × 14,456,452) × $299.33) + ((0.049 × 14,456,452) × $560.81) = $2,282,108,290.77.
28. U.S. Territories are considered part of the United States for purposes of determining the reporting obligations of domestic and foreign Reporting Companies. However, per ISO standard 3166-1, U.S. Territories are listed as jurisdictions separate from the United States for database management purposes.