The U.S. Treasury has implemented a new beneficial ownership reporting requirement pursuant to the Corporate Transparency Act (CTA). Although SEC-registered investment advisers are not subject to this requirement, state Registered Investment Advisers (RIAs) may be required to file a report with the Financial Crimes Enforcement Network (FinCEN) in 2024 unless their business qualifies for an exemption. FinCEN is a bureau of the U.S. Department of the Treasury. Though they are not subject to the reporting requirements, RIAs registered with the SEC may have related entities that must comply with the CTA.

Businesses that are required to disclose their beneficial owners are referred to as reporting companies. The term applies to:

  1. A corporation, a limited liability company (LLC), or business that was created in the U.S. by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
  2. A foreign company that was registered to do business in any U.S. state or Indian tribe by submitting a document with the secretary of state or any similar office under the law of a U.S. state or Indian tribe.

The beneficial ownership information (BOI) report contains identifying information about the individuals who own or control a company, directly or indirectly. The BOI report must disclose specific information about certain individuals who are associated with the reporting company.


Overview of the CTA

A great many domestic and foreign businesses that are registered to conduct business in a U.S. jurisdiction are subject to the reporting requirements established by the CTA. A company’s failure to comply with those reporting requirements might subject it to civil and/or criminal penalties.

Companies subject to the CTA must submit a BOI report to FinCEN. Certain companies are exempt from the reporting requirement. An RIA is exempt if the firm is an investment adviser as defined in Section 202 of the Investment Advisers Act of 1940, and the entity is registered with the SEC.

The CTA articulated 23 specific filing exemptions for entities such as insurance companies, banks, public companies that are registered with the SEC, broker-dealers, and pooled investment companies. There is an exemption for large operating companies that have:

  • Greater than 20 full-time U.S. employees;
  • An operating presence at a physical office in the U.S.; and
  • Filed a federal income tax or information return in the U.S. for the previous year to substantiate that they surpassed $5 million in domestic gross receipts or sales on a consolidated basis.

If they do not fall within any of the exemptions, reporting companies must file BOI reports. Individuals are deemed to be beneficial owners if they have a significant ownership stake in a company, either directly or indirectly. The individual must:

  • Have a major influence on the reporting company’s decisions or operations;
  • Own at least 25 percent of the company’s shares; or
  • Possess a similar level of control over the company’s equity.

According to an analysis of the CTA published on December 12, 2023, by K&L Gates, there is no blanket exemption for private fund advisers (PFAs) or state-registered investment advisers unless they are otherwise exempt. FinCEN has not yet expressed an opinion on whether general partners and managing members of private funds managed by exempted advisers are subject to CTA reporting requirements. The law firm’s opinion can be found here.


History of the Corporate Transparency Act

The CTA, which was passed with bipartisan support in 2021, created new BOI reporting requirements. The legislative intent of the statute was to make it more difficult for bad actors to hide or benefit from their ill-gotten gains by using shell companies and other opaque ownership structures.

FinCEN Director, Andrea Gacki, said this in a press release issued on December 21, 2023:

BOI can provide essential information to law enforcement, intelligence, and national security professionals as they work to protect the United States from bad actors who exploit anonymous shell companies to engage in money laundering, corruption, sanctions and tax evasion, drug trafficking, fraud, and a host of other criminal offenses with impunity, while legitimate businesses suffer from their misdeeds.

FinCEN will permit federal, state, local, and tribal officials, as well as certain foreign officials, to obtain BOI for authorized activities related to national security, intelligence, and law enforcement. Financial institutions may also have access to BOI in certain situations. The regulators for those financial institutions will also have access to BOI in order to supervise those entities. The information will not be publicly available.


BOI reporting requirements

All reporting companies must provide their:

  • Full legal name;
  • Trade or doing business as (d/b/a) name;
  • Principal place of business;
  • Jurisdiction where the business was formed or registered;
  • Tax ID number; and the
  • Identity of each individual who is a beneficial owner.

The information required in a BOI report varies based upon the date when the company was established. Businesses registered after January 1, 2024, must provide the names of no more than two company applicants in their filings:

  1. The person who directly files the formation or registration document of the reporting company; and
  2. The person who was primarily responsible for directing that filing.

Businesses established before January 1, 2024, may omit information regarding company applicants.

A reporting company that was created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report. A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after being notified of the company’s creation or registration to file its first BOI report.

No fee will be charged to submit a company’s BOI report to FinCEN. Reports may be filed electronically through a secure filing system available on FinCEN’s website at The system became available for filings on January 1, 2024.

Reporting companies are obligated to update their original filing when their circumstances change. For example, an updated filing may be required when beneficial owners change their address or their name because of marriage or divorce. Obtaining a new driver’s license might also trigger an updated filing requirement. In addition, when there are changes in a company’s operational structure or a new individual is given substantial control of the business, the firm might be required to submit an updated filing.



On December 21, 2023, FinCEN issued a final rule that established the framework for access to and protection of BOI. The final rule set forth the circumstances under which BOI reported in compliance with the CTA may be disclosed to federal agencies and financial institutions, as well as to state, local, tribal, and foreign governments.

The reporting requirements took effect on January 1, 2024. Starting in 2024, FinCEN will begin to provide access to BOI in phases to authorized government agencies and financial institutions.

FinCEN’s press release and final rule are available at FinCEN Issues Final Rule Regarding Access to Beneficial Ownership Information |

Even if their firm is not required to comply with the CTA, RIAs should be aware of this BOI filing requirement as they may be asked to advise their business entity clients.


About RIA Compliance Group: RIA Compliance Group is an investment adviser compliance consulting firm based in Delray Beach, Florida. The firm’s mission is to provide affordable, timely, practical, and cost-effective compliance advice. We help investment advisers to comply with the myriad of state and SEC regulations and compliance obligations facing their firms. RIA Compliance Group takes pride in giving personal service and real world compliance advice, not theoretical concepts and legalese. The firm interacts on a daily basis with SEC and state securities regulators.

RIA Compliance Group, LLC – 701 SE 6th Ave, Suite 201, Delray Beach, FL 33483 – Tel: 561-600-0564 –