Corporate Transparency Act Updates February 2024

February 14, 2024

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Corporate Transparency Act Updates

Beginning January 1, 2024, all new entities (“reporting company”) have been tasked with filing a Beneficial Ownership Information Report (BOIR) with the U.S. Dept. of Treasury, Financial Crimes Enforcement Network (FinCEN). This BOIR identifies the beneficial owners and anyone with “substantial control” of the reporting company.

Since then, several updates have taken place, and we’re currently revising the CTA information accordingly. Should you have any questions, please contact us, and we are happy to discuss the CTA and simple and easy ways to file your BOIR,

 BOIR Filing Q&A

The CTA requirement to submit a BOIR filing began in January 2024. Since that time, many questions have been posed about the security of information, the filing process, and the reasons for the CTA. Below are some of the most popular questions we have received, new changes to the reporting process, and, when available, the answers are directly from the FinCEN website.

 Q: I am worried about my business from a privacy perspective

A:  Under the Corporate Transparency Act, who can access beneficial ownership information?

FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.

FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling it in a way that protects its security and confidentiality. [Updated January 4, 2024]

Q: What information will a reporting company have to report about its beneficial owners?

A: For each individual who is a beneficial owner, a reporting company will have to provide:

  1. The individual’s name
  2. Date of birth
  3. Residential address
  4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license and the name of the issuing state or jurisdiction of the identification document (for examples of acceptable identification, see Question F.5).

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

FinCEN’s Small Entity Compliance Guide includes a checklist to help identify the information required to be reported (see Chapter 4.1, “What information should I collect about my company, its beneficial owners, and its company applicants?”). [Issued September 18, 2023]

NOTE: The session will expire after inactivity for 15 minutes; you cannot save the form and return to complete it, so be sure you have all the documentation you need before beginning.

 Q: What information will a reporting company have to report about itself?

A: A reporting company will have to report:

  1. Its legal name
  2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names
  3. The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters);
  4. Its jurisdiction of formation or registration
  5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

A reporting company will also have to indicate whether it is filing an initial report, a correction, or an update of a prior report.

FinCEN’s Small Entity Compliance Guide includes a checklist to help identify the information required to be reported (see Chapter 4.1, “What information should I collect about my company, its beneficial owners, and its company applicants?”). [Issued September 18, 2023]

Q: What do I do when my information changes?

A: If there is any change to the required information about your company or its beneficial owners in a beneficial ownership information report that your company filed, your company must file an updated report no later than 30 days after the date of the change.

A reporting company is not required to file an updated report for any changes to previously reported information about a company applicant.

Chapter 6.1, “What should I do if previously reported information changes?” of FinCEN’s Small Entity Compliance Guide provides additional information. [Issued September 18, 2023]

NOTE: If you file a BOIR and then become exempt, then you must amend the BOIR to say you are now exempt

Q: What if my entity is owned by a trust?

A: FinCEN is working on this, and trust FAQs will be coming to assist!

Be Aware of scam correspondence!

FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages, click on any links, or scan any QR codes within them.

Corp1 has a solution for your BOIR filing

Corp1’s Annual Report & Corporate Transparency Act (CTA) Premium Filing & Monitoring Service powered by SingleFile makes managing Annual Reports and the new CTA mandates a breeze. This technology-powered platform helps thousands of organizations and advisors schedule, pay, and file on time, reducing time, errors, and missed deadlines.

Subscribing to this service removes the hassle of remembering to pay and file, risks incurring penalties and interest, and possibly going into inactive status.  It also allows you to subscribe and file your new Beneficial Ownership Information Report (BOIR) under the CTA requirements.  You can file and make any corrections or updates due to changes in address, beneficial owners, or those with substantial control over the company for one full year at no additional cost.

The system is set up for us to invite you to sign up and set up your account with your own password, and all data entered is secure and private.  Remember: all companies in existence before 1/1/24 have one full year to file their BOIR.  Those newly formed companies AFTER 1/1/24 must file their BOIR within 90 days of receiving notice the company is filed/completed. Contact us if you have any questions!

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