Effective Jan. 1, 2024, the Corporate Transparency Act requires certain entities, including many small businesses, to report information about the individuals who ultimately own or control them (also known as their “beneficial owners”) to the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.

A separate regulatory requirement currently requires many financial institutions to also collect beneficial ownership information, or BOI, from certain customers that seek to open accounts as part of federal customer due diligence requirements.

ABC has expressed serious concerns with the Treasury’s FinCen’s implementation of CTA. FinCEN’s implementing regulations require millions of small businesses, including nearly every employer with 20 or fewer employees, to report personal information of their beneficial owners and update that information periodically throughout the life of the business.

On March 1, a federal judge for the U.S. District Court for the Northern District of Alabama Northeastern Division ruled that the CTA is unconstitutional. The decision, however, only applies to members of the association involved in the suit, and all other businesses are still required to adhere to the CTA’s filing requirements. ABC has called on Congress to examine the ruling and has argued that a stay in enforcement should apply to all affected parties. On March 11, Treasury appealed the decision.

ABC, along with 100 organizations representing millions of small businesses nationwide, sent a letter to Congress strongly supporting legislation introduced by Rep. Warren Davidson, R-Ohio, to repeal the CTA. ABC also calls on Congress to enact the Protect Small Business and Prevent Illicit Financial Activity Act (S. 3625). The legislation, championed by Sen. Tim Scott, S.C., would delay the onerous CTA filing requirements and accompanying jail time and penalties by one year. A similar bipartisan bill sponsored by Reps. Zach Nunn, R-Iowa, and Joyce Beatty, D-Ohio, passed the House late last year 420-1.

Information about FinCEN’s BOI reporting requirements:

• BOI Webage
• Brochure Introduction to BOI Reporting
• Frequently Asked Questions
• Companies Exempt From Reporting
• Small Entity Compliance Guide
• How to File the Report
• Reporting Deadlines
• BOI Videos
• Beneficial Ownership Questions? Contact FinCen
• July 26 Notice to Customers of Financials Institutions About Reporting BOI

ABC encourages members and small business owners to discuss FinCEN’s BOI reporting requirements with counsel.

Please continue to monitor Newsline for additional updates.