Beneficial ownership
The Corporate Transparency Act requires most U.S. entities and foreign entities registered in the U.S. to report beneficial-ownership information to FinCEN. The regime has been subject to constitutional challenge, multiple injunctions, and interim final rules — leaving a fluid reporting environment through 2025 and into 2026.
What is reported
For each reporting company:
- Identifying information about the company (name, formation jurisdiction, address, taxpayer ID).
- For each beneficial owner: full legal name, date of birth, residential address, unique identifying number from a non-expired document (passport, driver's license).
- For each company applicant (the natural person who filed the formation document): same identifying information.
Who must report
A "reporting company" is:
- A corporation, LLC, or similar entity created by filing with a U.S. state Secretary of State (domestic reporting company).
- A foreign corporation, LLC, or similar entity registered to do business in the U.S. by filing with a U.S. state (foreign reporting company).
Twenty-three categories of entities are exempt — including SEC-reporting issuers, banks, investment-advisers, insurance companies, accounting firms, tax-exempt entities, "large operating companies" (more than 20 full-time employees, more than $5 million U.S. gross receipts, physical U.S. office), and certain dormant subsidiaries.
Thresholds
No threshold — every non-exempt reporting company must report regardless of size. A beneficial owner is any individual who directly or indirectly exercises substantial control, or owns or controls at least 25% of the ownership interests.
The form
BOIR (Beneficial Ownership Information Report) filed electronically through FinCEN's BOI E-Filing System. Pre-2024 existing entities must file initial reports; entities created in 2024 within 90 days of formation; entities created after 2024 within 30 days.
Penalties
- Civil: up to $500 per day, capped at $10,000.
- Criminal: willful violation, fine up to $10,000 and/or imprisonment up to two years.
- Unauthorized disclosure of BOI by recipients: civil $500/day cap $250,000; criminal $250,000 and/or five years.
Litigation and interim final rules
The CTA has been challenged on constitutional grounds (commerce clause and federalism). The U.S. District Court for the Northern District of Alabama in NSBA v. Yellen (March 2024) held the CTA unconstitutional as to the plaintiff. The Eleventh Circuit reversed in part. The Fifth Circuit, the Eastern District of Texas, and other tribunals issued preliminary or nationwide injunctions at various points in 2024-2025. FinCEN issued interim final rules in March 2025 narrowing the reporting obligation to foreign reporting companies only, with substantial parts of the original domestic-reporting regime suspended pending further developments. The framework remains in flux through 2026; the changelog will reflect updates.
Relief procedures
No formal voluntary-disclosure program. Late or corrected filings without sanction if filed promptly upon learning of error and FinCEN accepts good-faith correction.
Interaction with luxury-asset holdings
Most luxury-asset holding LLCs and corporations fall within the reporting regime (subject to the current scope after interim rules). Trusts are not reporting companies but may have entities they own that are reporting companies. Family-office structures often include multiple reporting companies.
Primary Sources
- 31 U.S.C. §5336 (Corporate Transparency Act).
- 31 C.F.R. §1010.380 (FinCEN regulations).
- National Small Business Association v. Yellen, ND Ala. March 1, 2024, and subsequent appeals.
- FinCEN interim final rules (2025).
- FinCEN BOI page — fincen.gov/boi.
Reviewed May 2026