The Corporate Transparency Act requires all US LLCs to report Beneficial Ownership Information to FinCEN unless an explicit statutory exemption applies.
A Beneficial Owner is any individual who exercises substantial control over the company OR owns/controls at least 25% of the ownership interests.
Non-US resident founders can submit an unexpired foreign passport as their primary acceptable identification document.
Reporting companies created in 2024 have 90 days; entities created in 2025 and 2026 have 30 calendar days from formation notice.
Any change in reported information (e.g., renewal of passport, change of home address) MUST be reported within 30 calendar days.
1. Overview of the Corporate Transparency Act (CTA)
Enacted as part of the Anti-Money Laundering Act of 2020 (codified at 31 U.S.C. § 5336), the Corporate Transparency Act (CTA) represents the most significant expansion of US corporate reporting requirements in a century.
Administered by the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury, the CTA aims to prevent illicit actors from concealing illicit wealth through anonymous shell companies.
Critical Distinction from State Records:
FinCEN BOI filings are NOT public records. The FinCEN database is a private, encrypted government repository accessible only to federal national security agencies, law enforcement, and financial institutions with customer consent. The public, credit agencies, and competitors cannot view your BOI filing.
Statutory Authority: 31 U.S.C. § 5336(c)(2)
Beneficial ownership information reported under this section shall be confidential and may not be disclosed by any officer or employee of the United States...
2. What is a Domestic Reporting Company?
Under 31 CFR § 1010.380(a)(1), a 'domestic reporting company' is any entity that is:
- A corporation;
- A limited liability company; or
- Created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.
Exemptions:
The statute provides 23 specific exemptions (such as publicly traded companies, banks, credit unions, and registered investment firms). Crucially, the 'Large Operating Company' exemption requires more than 20 full-time US employees and over $5,000,000 in gross receipts on a federal tax return.
Virtually all foreign-owned Single-Member LLCs, e-commerce stores, and digital startups are classified as Domestic Reporting Companies and MUST file.
No Revenue Exemption
Pre-revenue startups, holding companies, and zero-activity LLCs are NOT exempt from FinCEN BOI reporting.
3. Identifying Beneficial Owners & Company Applicants
The CTA requires reporting two distinct categories of individuals:
1. Beneficial Owners:
Any individual who, directly or indirectly, either:
- Exercises substantial control over the reporting company (e.g., senior officers, managers, CEO); OR
- Owns or controls at least 25 percent of the ownership interests of the company.
In a Single-Member LLC, the foreign founder is both the 100% equity owner and the individual exercising substantial control.
2. Company Applicants:
For entities formed on or after January 1, 2024, the filing must also report up to two 'Company Applicants':
- The individual who directly files the document that creates the domestic reporting company (e.g., the NorthBoundaries filing paralegal).
- The individual who is primarily responsible for directing or controlling the filing of the creation document.
4. Document Submission for Non-Resident Foreign Owners
For each Beneficial Owner, the BOI report must contain:
1. Full legal name.
2. Date of birth.
3. Complete current residential street address (foreign home address is required; commercial addresses are prohibited for beneficial owners).
4. A unique identifying number and issuing jurisdiction from an acceptable identification document:
- For US residents: A state driver's license or US passport.
- For Non-US residents: An unexpired foreign passport issued by a foreign government.
5. An image of the identifying document (crisp color photo/scan of the passport bio page).
FinCEN Identifier Option:
International founders who own multiple US entities can apply for a unique 'FinCEN Identifier' directly on the FinCEN portal, allowing them to reference an 12-digit code on subsequent filings rather than re-submitting passport scans.
Strict Timelines:
- Entities created in 2025 and 2026: Must submit their initial BOI report within 30 calendar days from the date of official notice that the entity's creation has become effective under state law.
- The 30-Day Mandatory Update Rule: If there is ANY change in previously reported information (such as you move to a new apartment in your home country, renew your passport with a new passport number, or change your legal name), you must submit an updated report within 30 CALENDAR DAYS of that change.
Statutory Penalties:
Willful failure to report or providing false information triggers severe federal sanctions under 31 U.S.C. § 5336(h):
- Civil Penalties: Up to $500 per day (adjusted annually for inflation, currently over $590/day) for each day the violation continues.
- Criminal Penalties: Fines up to $10,000, imprisonment for up to two years, or both.
Frequently Asked Statutory Questions
Does NorthBoundaries file the FinCEN BOI report automatically upon incorporation?
Yes. Our automated compliance engine compiles the initial Beneficial Ownership Information and files it directly with FinCEN within the 30-day statutory window.
What happens if my passport expires in 2 years?
When your passport is renewed, you have 30 calendar days to upload the new passport number and document image to FinCEN. NorthBoundaries provides automated reminders prior to document expiration.
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