FinCEN Final Beneficial Ownership Reporting Rule

On September 29, FinCEN issued a final rule implementing the bipartisan Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting provisions. This rule will strengthen the integrity of the U.S. financial system by making it harder for illicit actors to use shell companies to launder their money or hide assets.

The rule describes:

• who must file a BOI report
• what information must be reported, and
• when a report is due

Specifically, the rule requires reporting companies to file reports with FinCEN that identify two categories of individuals: (1) the beneficial owners of the entity; and (2) the company applicants of the entity. According to FinCEN, the rule aims to minimize burdens on small businesses and other reporting companies but to help, FinCEN will develop compliance and guidance documents to assist reporting companies. Two other rules, covering access to the database and an update to the existing CDD rule, are still pending.