What is a Beneficial Ownership Report?
A Beneficial Ownership Report is a formal document that companies must submit to disclose the identities of individuals who ultimately own or control the company. This report is crucial for compliance with regulations like the Corporate Transparency Act (CTA), which seeks to increase transparency and prevent financial crimes by requiring companies to reveal their true owners.
The report includes information about the company’s beneficial owners, typically those holding at least 25% ownership or control. Beneficial owners must be natural persons who benefit from the company’s assets or profits, and they must be identified with specific details such as their name, date of birth, address, and unique identifiers like a passport or driver’s license number.
Who must file this report?
All qualifying companies, including most corporations, limited liability companies (LLCs), and similar entities registered in the United States, are required to file a Beneficial Ownership Report. This ensures that FinCEN and other regulatory authorities have up-to-date information about the individuals who control or benefit from the company’s activities. Failure to file or providing false information can result in significant penalties.
