Here’s what you need to know.

Under the Corporate Transparency Act (CTA), which went into effect on January 1, 2024, your company may be required to report information about the people who own or control it — the company’s beneficial owners — to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

What does this mean for your business?

If your business is currently registered with the Secretary of State, you must also register with the federal government by January 1, 2025. 

If you established a new business after January 1, 2024, and are required to register with the Secretary of State, you will have 90 days to register with the federal government.

This law requires you to:

• Identify any individual who exercises substantial control over your business
• Identify anyone who owns at least 25 percent of your company
• Identify a company applicant
• Provide information on the company itself

Refer to the Resource section of this page for further information on these requirements.

Why do companies have to report beneficial ownership information?

While most companies in the U.S. are legitimate businesses, criminals can use companies to provide cover for money laundering, corruption, tax evasion, drug trafficking, fraud, and other crimes. This illegal activity harms innocent people and legitimate businesses, including small businesses.

To address this problem, Congress passed the CTA. This law requires many companies formed or operating in the United States to report their Beneficial Ownership Information (BOI) to FinCEN.

Collecting BOI will help protect national security and make it harder for criminals and other bad actors to hide from the law.

Resources

For further details regarding this law, please refer to any of these resources:

Beneficial Ownership Information
Beneficial Ownership FAQs
Beneficial Ownership Small Entity Guide
Beneficial Ownership Information Reporting Requirements 
American Bank is committed to keeping you and your business up-to-date with the latest regulatory and compliance developments. Our goal is to ensure that you are always well-informed and in the know.