The definition of a “beneficial owner” can vary depending on the specific regulations and requirements under the Corporate Transparency Act (CTA) or other relevant laws. However, generally, a beneficial owner is an individual who enjoys the benefits of ownership or has the ability to control or influence a legal entity, even if they are not listed as the official owner on paper. Some common criteria for determining beneficial ownership include:

1. Ownership Percentage: An individual who directly or indirectly owns or controls at least 25% of the reporting company’s ownership interests.
2. Control or Influence: Someone who exercises substantial control over the entity’s decision-making processes, or has the authority to influence its operations or management.
3. Financial Interest: Individuals who benefit financially from the entity’s profits, assets, or other financial gains, even if they are not formally recognized as owners.
4. Voting Rights: Individuals with significant voting rights, the power to control the appointment, or removal of the entity’s directors or managers.
5. Senior Officers: everyone who has the title CEO, CFO, COO, and General Counsel, or anyone who performs similar functions.

CTA filings typically require the disclosure of information about the beneficial owners of the entity, including their names, addresses, dates of birth, and other identifying details. The filings may also involve providing supporting documentation to verify the accuracy of the information provided.

1. For frequent filers (or those that will be using a third party to file on their behalf), there is an option to obtain a unique FinCen ID# to be filed with the BOI report rather than provide all your personal ID with each filing. (However, those who avail themselves of this option will then be required to update their information with FinCEN potentially forever, until death)

Failing to file a BOI report can result in civil penalties of up to $500 per day, a $10,000 fine and/or 2 years imprisonment. Individuals who knowingly and willfully violate the CTA may face criminal penalties of up to five years in prison. Who is considered liable?

1. A person who causes the failure to report the complete or updated BOI.
2. Or is a Senior Officer at the time of the failure.