A beneficial owner is defined as any individual who, directly or indirectly, owns or controls 25% or more of the ownership interests in such company or exercises substantial control over the entity.

Company Applicant: The person lodging the articles of incorporation or registration to form the company (for newly incorporated companies). This may include specialists such as lawyers or service agents responsible for the incorporation of the company.

Newly incorporated companies: You need to file your return within thirty days after incorporation or registration. Existing companies: The reporting deadlines will, however depend on when the reporting regulations take effect, but existing companies will have one year from the effective date of the CTA regulations to submit their initial report.

Updating Information: In case any of the reported information changes; for instance, ownership or addresses, the same should be updated within 30 days of that change.

FinCEN will start accepting Beneficial Ownership Information Reports on January 1, 2024. Reports will not be accepted prior to this date.

Certain entities, known as “reporting companies,” are required to submit their beneficial ownership information to FinCEN. Reporting companies are categorized into two types: domestic reporting companies and foreign reporting companies.

• Domestic Reporting Companies: These are entities such as:
  • Corporations
  • Limited liability companies (LLCs)
  • Any other entity created by filing a document with a secretary of state or similar office under the laws of a state or Indian tribe.
• Foreign Reporting Companies: These are entities that are:
  • Corporations, LLCs, or other entities formed under the laws of a foreign country, and
  • Registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or similar office under U.S. state or Indian tribal laws.

If your company was created or registered by filing a document with a state or tribal office, it qualifies as a reporting company, unless exempted. For these definitions, "state" includes any U.S. state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, and other U.S. territories or possessions.

In general, a beneficial owner is an individual who either:

1. Directly or indirectly exercises "substantial control" over the reporting company, or
2. Directly or indirectly owns or controls 25 percent or more of the company's "ownership interests."

Substantial Control: An individual exercises substantial control if they have significant influence over major decisions of the company. For example:

• Senior officers, such as presidents or chief financial officers, are considered to have substantial control.
• Other rights or responsibilities may also indicate substantial control. For detailed information, refer to the Beneficial Ownership Information Reporting Regulations at 31 CFR §1010.380(d)(1).

Ownership Interests: Ownership interests refer to rights established in the reporting company, including shares of stock and other ownership instruments. Indirect ownership is also included. For more details, see the Beneficial Ownership Information Reporting Regulations at 31 CFR §1010.380(d) (2).

Examples:

1. LLC Example:
   • You are the sole owner and president of an LLC, making all key decisions.
   • You are a beneficial owner because you both exercise substantial control (as the president) and own 100% of the company's interests.
2. Corporation Example:
   • The corporation's ownership is divided among three individuals: A (50%), B (40%), and C (10%). The President, D, does not own stock.
   • Individuals A and B are beneficial owners due to owning 25% or more of the stock.
   • Individual D, as President, is also a beneficial owner because they exercise substantial control.
   • Individual C, with only 10% ownership and no substantial control, is not a beneficial owner.
3. Corporation with Multiple Owners and Officers:
   • The corporation is owned by four individuals, each with 25% of the stock, and four senior officers (CEO, CFO, COO, General Counsel).
   • Individuals A and B are beneficial owners due to owning 25% or more of the stock.
   • All four senior officers are also beneficial owners due to their substantial control.

In summary, beneficial owners include those who either hold 25% or more of the company's ownership interests or exercise substantial control over the company, such as senior officers.