Q&A On Complying With Beneficial Ownership Disclosure Requirement of the Federal Corporate Transparency Act PDF Free Download
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▪ Q&A On Complying With
Benecial Ownership
Disclosure Requirement
of the Federal Corporate
Transparency Act
In this issue:
Q&A On Complying With Benecial Ownership Disclosure
Requirement of the Federal Corporate Transparency Act
Q. What is the disclosure requirement about?
A. The Federal Corporate Transparency Act is an an-money laundering
and an-terrorism funding eort by the U.S. Department of the
Treasury’s Financial Crimes Enforcement Network (FinCEN) that requires
“reporng companies” (to include corporaons and limited liability
companies) to provide certain idenfying informaon on their
“benecial owners” (the natural persons who own and control them)
and informaon on “company applicants” who form and register
reporng companies. FinCEN will make that informaon available to
federal, state, and local law enforcement agencies and regulatory
agencies and to nancial instuons that are required by the Corporate
Transparency Act to obtain that informaon.
Q. What is a “reporng company”?
A. A “domesc reporng company” is a legal enty – to include
corporaons, trusts, and limited liability companies – formed by ling a
document with the Secretary of State’s oce in a given state or by
ling a comparable document with a comparable oce of an Indian
Tribal Government.
A “foreign reporng company” is an enty formed under the laws of a
non-U.S. jurisdicon and which is required to be registered with a
Secretary of State to transact business in that state.
Connued...
Small Business Notes
Minnesota Department of Employment & Economic Development (DEED)
Volume 38, Number 2
February 2024
Small Business Notes
Q. Are small business enes exempt from the denion of “reporng company” and the
reporng requirements of the law?
A. NO. There is no exempon based on size. There are exempons for twenty three legal enes
whose ownership informaon is available through licensing or registraon by regulatory authories:
Securies reporng issuer
Governmental authority
Banks
Credit unions
Depository instuon holding companies
Money service businesses and money transmiers
Broker or dealer in securies
Security exchanges or clearing agencies
Other Exchange Act registered enes
Investment companies or investment advisors
Venture capital fund advisors
Insurance company
State-licensed insurance producers
Commodity Exchange Act registered enes
Accounng rms
Public ulies
Financial market ulies
Pooled investment vehicles
Tax exempt enes
Enes providing services to tax exempt organizaons
Large operang companies dened as having more than 20 full me employees in the U.S.,
having an operang presence in the U.S., and having $5 million or more in reportable sales
or operang revenue
Subsidiaries of some exempted enes not to include money services businesses or certain
pooled investment vehicles
Inacve enes
Connued...
Page 2 of 5 Volume 38, Number 2
February 2024
Small Business Notes
Q. Who is a “benecial owner”?
A. A benecial owner is an individual who, directly or indirectly, either exercises substanal
control over a reporng company or owns or controls at least 25 percent of the ownership interests
in the company.
“Substanal control” is exercised by senior ocers of the company such as the president. CFO,
general counsel, CEO, or COO and by others who may have authority over the appointment or
removal of any senior ocer or over a majority of the board of directors, or who direct, determine
or have substanal inuence over important decisions made by the reporng company.
Ownership of a 25% or more interest in the company can include: equity stock, any capital or prot
interest, any instrument converble to equity stock or prot interest, any opon for purchase or sale
of stock, any other instrument or contract that established ownership.
Q. Who is a “company applicant”?
A. A “company applicant” is an individual who directs or controls the creaon of the company. For a
domesc reporng company this is the individual who directly les the document with the Secretary
of State.
Note that the nal benecial ownership rules limit reporng to the company applicants of reporng
companies formed aer January 1, 2024. For those companies the following informaon is required
on a company applicant:
Full legal name
Date of Birth
Complete current address
A unique idenfying number issued by an approved source such as a state drivers license, a
passport, or other governmental idencaon.
Connued...
Page 3 of 5 Volume 38, Number 2
February 2024
Small Business Notes
Q What informaon must be provided for the “reporng company” itself?
A. The following informaon is required for each reporng company:
The full name of the reporng company
Any trade name or “DBA” name
The business address of the reporng company
The State or Tribal jurisdicon of formaon
A unique idener associated with the reporng company such as an IRS TIN or EIN.
Q. What is the deadline for ling an inial report?
A. Businesses created before January 1, 2024 have unl January 1, 2025 to le their inial report
with FinCEN.
A Business formed or created aer January 1, 2024 will have 90 calendar days from the date of
creaon or registraon to le their inial report. Aer January 1, 2025 this deadline is shortened to
30 days.
Aerwards, a reporng company has 30 days to le an update report for any change to previously
reported informaon. If the change involves correcon of inaccurate informaon earlier reported,
the reporng company has 30 days from the date it knew, or should have known that the earlier
informaon was inaccurate.
Q. How is the reporng accomplished?
A. Benecial ownership informaon is led electronically through FinCEN’s secure website:
https://boiefiling.fincen.gov.
Page 4 of 5 Volume 38, Number 2
February 2024
Small Business Notes
Past issues of
Small Business Notes
are available on the
Department of
Employment and
Economic Development
website at
Small Business Notes
Department of Employment and Economic Development
180 E. 5th Street, Suite 1200, St. Paul, MN 55101
651-259-7114 | Toll Free: 800-657-3858 | Fax: 651-296-5287 | TTY/TDD: 651-282-5909 | MN DEED
An Equal Opportunity Employer and Service Provider
Volume 38, Number 2
February 2024
Page 5 of 5
