Driver License Versus Passport for Beneficial Owner Reporting

As discussed in our earlier posts, most recently on February 20, 2024, the Corporate Transparency Act requires many business entities to report information about their beneficial owners in a brand-new government database.

As part of filing the initial report, entities must provide a scan of the identifying document related to each beneficial owner. The identifying document is typically a driver license or a passport.

Whenever possible, when submitting their initial reports, entities should use the driver license of a beneficial owner instead of the beneficial owner’s passport. This reduces the need for the entity to file a change report in the future.

Entities are required to file a change report within 30 days of a change in the information related to the entity or one or more of the beneficial owners of the entity. Changes that trigger the requirement for filing a change report includes the change of the identifying number on the identifying document of a beneficial owner that was submitted with the initial report.

When a beneficial owner renews his or her driver license, the identifying number on the license typically does not change. Therefore, if the entity used a scan of the beneficial owner’s driver license as part of filing the initial report, the entity will not have to file a change report when the beneficial owner renews his or her license, since the identifying number remains the same on the new license.

In contrast, when a beneficial owner renews his or her passport, the identifying number on the passport generally changes from that of the previous passport. Therefore, if the entity used a scan of the beneficial owner’s passport as part of filing the initial report, the entity will be required to file a change report when the beneficial owner renews his or her passport.