A first set of guidance materials to the upcoming beneficial ownership information (BOI) reporting requirements has been published by the Financial Crimes Enforcement Network (FinCEN). The guidance is set to help the public, especially the small business community, to understanding the new reporting obligations.

The upcoming regulations, which come in on January 1, 2024, will require many corporations, including limited liability companies and other entities that are created or registered to do business in the US, to report information about their beneficial owners to FinCEN.

“The Corporate Transparency Act, through its beneficial ownership reporting requirements, provides the historic opportunity to unmask shell companies and protect the US financial system from abuse by money launderers, drug traffickers, sanctioned oligarchs, and other criminals,” said Himamauli Das, Acting Director of FinCEN.

Reporting rule

Within the guidance, which follows a fact sheet on the “reporting rule” that FinCEN published in September 2022, the government agency has now published a raft of helpful documents:

• An FAQ about the reporting requirement;
• One Pagers on key filing dates and key questions; and
• An introductory video plus a more detailed informational video about the requirements.

The guidance answers questions on the definition of beneficial ownership information, exemptions from reporting, who should report and how to send in a report.

“We are committed to making this transparency process as simple as possible, particularly for small businesses who may have never heard of or interacted with FinCEN before,” Das added.

The ‘reporting rule’ is the first of three rules created by FinCEN to set up the beneficial ownership registry – which is required by the Corporate Transparency Act (CTA). The second will relate to those who can access the registry, and the third is connected to updating the existing customer due diligence (CDD) rule. Further guidance on these rules is expected from the agency in due course.