Friday, September 22, 2023

All. Important Update: Corporate Transparency Act and Beneficial Owner's Information Reporting

BEMA International nonprofit, and organization members

Please consider your filing information starting January 2024.

BEMA International

Upcoming changes brought about by the

  • Corporate Transparency Act and its impact on millions of small businesses. Starting January 1, 2024, the
  • Financial Crimes Enforcement Network (FinCEN),

in an effort to crack down on criminals and other bad actors laundering illicit funds through the United States using shell and front companies, will institute a reporting requirement that identifies two categories of individuals: the beneficial owners of a newly formed entity (or Reporting Company) , and individuals who have filed an application with specified governmental authorities to create the entity or register it to do business (Company Applicant).

Which types of organizations are considered reporting companies?

The final rule states that BOI Reports must be filed by domestic reporting companies and foreign reporting companies.

A domestic reporting company is defined as an entity that is a corporation, LLC, or other entity created by filing documents with a secretary of state or similar office under state or tribal laws.

A foreign reporting company is an entity created under foreign law and registered to do business in the US by filing documents with a secretary of state or similar office.

Please note that certain entities are exempt from being considered "Reporting Companies."

These include entities such as securities reporting issuers, governmental authorities, banks, credit unions, and others listed in the final rule.

Understanding whether your entity needs to file a Beneficial Ownership Information Report involves a two-step process: determining the entity's classification and then checking if it falls within the exemptions outlined by the Corporate Transparency Act and FinCEN regulations.

ALLl individuals owning, managing, or advising entities are encouraged to review these requirements and exemptions before January 1, 2024.

How is Beneficial Owner defined?

A "Beneficial Owner" of a Reporting Company is any individual who directly or indirectly exercises substantial control over the company or owns or controls at least 25 percent of the ownership interests of such Reporting Company.

How is Company Applicant defined?

FinCEN will collect the information for 2 Company Applicants at most for any BOI Report.

The Company Applicant will always be the individual who directly files the document that creates the Reporting Company (or for foreign reporting companies, it's the individual who directly files the document that first registers the Reporting Company).

For both domestic and foreign Reporting Company scenarios, if there is a secondary individual primarily responsible for directing or controlling the filing, such individual is also considered a Company Applicant.



bEMA International

Washington, D.C.  20020

Cooperation, Collaboration, Communication, Coordination, Community engagement, and  Partnering (C5&P)

A 501 (c) 3 organization




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