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Beneficial Ownership Reporting and Your Entity Choice
The Corporate Transparency Act (CTA), a 2021 law at 31 U.S.C. 5336, asks some companies to tell the Treasury's Financial Crimes Enforcement Network (FinCEN) who owns them. For owners choosing an entity, the news is that a company formed by a state filing, every Illinois LLC and corporation included, no longer files. Our checklist is the Hedgerow Owner-Register Check, below. The rule is 31 CFR 1010.380.
The short version
- Companies formed by a state filing do not file beneficial ownership information (BOI) reports. That exemption started March 26, 2025, and August 14, 2026 made it permanent.
- Only a company formed under foreign law and registered in a U.S. state might still file, and U.S.-person owners are left out.
- Willful violations carry a civil penalty up to $606 a day, plus a criminal penalty: $10,000 at most, 2 years in prison, or both.
Who it covers
| Group | Files? | Note |
|---|---|---|
| Illinois LLC, corporation or LP formed by a state filing | No | Exempt as a domestic entity, even with non-U.S. owners |
| Company formed under foreign law, registered in a state | Yes, unless exempt | With only U.S.-person owners it files without owner details |
| U.S.-person owner or company applicant | Not reported | Non-U.S. persons still are |
The numbers
| Item | Amount | Year |
|---|---|---|
| Civil penalty per day, willful violation | Up to $606 (statute: $500) | 2025 table; none found for 2026 |
| Criminal penalty, willful violation | Up to $10,000, 2 years, or both | Statute |
- An interim rule exempts domestic companies
- On its face, the CTA is upheld by the Eleventh Circuit
- The final rule makes the exemption permanent
- Two CTA cases: the Supreme Court denies review
Source: FinCEN, Federal Register, court and docket records
On June 18, 2026 a House committee reported H.R. 425, a repeal bill. As of October 29, 2026 we found no floor vote.
The Hedgerow Owner-Register Check
- Ask how the company was formed: a state filing, or foreign law?
- State filing: domestic exemption; keep the formation papers.
- Foreign-formed in a state: check the exemption list and each owner's U.S.-person status.
- If filing applies, calendar the 30-day clocks.
- Skip 2024 articles telling U.S. companies to file.
What it means for year-round planners
- Forming in Illinois adds no BOI step; see choosing a business structure.
- Owners abroad, or a foreign-formed company: ask before registering in a state.
- Put dates on the compliance calendar only when filing applies.
Mistakes people make
- Treating 2024 deadline stories as current for a U.S. company.
- Believing that U.S.-person owners make a foreign-formed company exempt.
- Paying a stranger who says a BOI penalty is due; FinCEN says its first penalty letters do not come by email or phone.
Whether an exemption applies, who counts as a beneficial owner, or a FinCEN notice are questions for an attorney.
Common questions
Must my Illinois LLC file a BOI report?
No. A company formed through a filing with a state's secretary of state is exempt as a domestic entity, whoever owns it.
Was the CTA struck down?
No. The statute stands, and a FinCEN rule is the source of the domestic exemption. The Supreme Court's October 5, 2026 denials of review do not decide every challenge.
What if a company formed abroad registers in Illinois?
It may have to file unless an exemption applies, reporting non-U.S. owners within 30 days of registering.