Businesses operating in the United States have one more requirement to satisfy. The US Corporate Transparency Act was passed by Congress to increase corporate and business transparency of company ownership and thwart criminal activity that sometimes hides behind business walls. By requiring companies — even small ones — to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), the Act aims to prevent criminal activity such as money laundering, fraud, and financing of terrorism. Businesses that started before January 1, 2024, have until January 1, 2025, to file the report.

Enacted by Congress in 2021, the Corporate Transparency Act requires companies doing business in the United States to report information about their “beneficial ownership,” i.e., the individuals who ultimately own or control the business. The report is completed just once, although it must be updated when the business experiences changes in ownership.

Completion of the report is fast and easy, with most companies needing to provide just four pieces of information. Each owner must declare their name, date of birth, address, and the identifying number and issuer from a current driver’s license, passport, or identification document issued by a state, local government, or Indian tribe.

Companies that started in 2024 and subsequent years have 90 days to file their report after receiving notice that their company’s creation or registration is effective.

Failure to report comes with steep fines. Penalties of up to $500 per day of a continuing violation can be imposed, along with criminal penalties of up to two years in prison.

Moody’s published a good explanation of the requirement, and all of the rules can be found on the website of the US Treasury Financial Crimes Enforcement Network.

Don’t wait. File your BOIR before the end of 2024.