Beneficial Ownership Information

While your business no longer has to directly register with the government, it still needs to provide beneficial ownership information when opening a bank account.

The Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN, exempts U.S. domestic businesses from reporting beneficial ownership information directly to the government, a change that went into effect in 2026.

However, all U.S. banks are still subject to FinCEN regulations that require collecting beneficial ownership information for business customers.

Any business that banks with MainStreet Bank must identify all beneficial owners that maintain 25% or more ownership of that business.

Beneficial owners can be silent owners, meaning they are not actively taking part in business matters day to day, or they can be active owners, who take on a hands-on role in company management.

Businesses must also identify a control person. A control person is anyone that exercises significant control over the business. This can be the same person identified as a beneficial owner, or they can be an executive or manager at the business.

If no one person maintains an ownership stake of 25% or more, the business must still identify a control person. This may be a company president, CEO, or CFO, for example.

If a business has a parent company, then the business must report the ultimate beneficial owner of the parent company. The requirement to collect beneficial ownership extends all the way up through layers of corporate ownership, until a human person can be identified.

Just as individuals show ID to open a bank account, U.S. regulations require us to know who is behind corporate accounts. This protects legitimate companies from unknowingly being exposed to or doing business with illicit networks.

Criminal enterprises frequently create “shell” or “front” companies with virtually untraceable ownership to move illicit funds across the globe. By requiring owner identification, we can deter criminals and assist law enforcement in tracing funds involved in money laundering, terrorist financing, human trafficking, and other financial crimes.

Persons identified as beneficial owners or control persons must sign and attest to MainStreet Bank’s Certificate of Beneficial Ownership, provide a valid, unexpired, government-issued ID, and supply other identifying details.

FinCEN outlines the Customer Due Diligence (CDD) Final Rule on their website. They also publish an FAQ page that answers basic questions regarding the rules and why banks have to comply. You can explore more definitions and requirements on their website.