The CTA refers to the Corporate Transparency Act which is a federal law enacted in the United States as part of the National Defense Authorization Act for Fiscal Year 2021. The CTA was designed to address concerns related to money laundering, illicit financial activities, and the misuse of corporate entities for illegal purposes.

The key objective of the CTA is to enhance transparency in corporate ownership by requiring certain reporting companies to disclose information about their beneficial owners. It aims to prevent the use of anonymous shell companies for illicit purposes and to provide law enforcement agencies, regulatory bodies, and financial institutions with access to accurate and up-to-date beneficial ownership information.

Under the CTA, reporting companies are required to file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. The BOIR includes information about the company and its beneficial owners, such as their names, addresses, dates of birth, and identification numbers.

The CTA also establishes penalties for non-compliance and authorizes FinCEN to take enforcement actions against reporting companies that fail to meet the reporting requirements. It’s important to note that the CTA sets forth the broad framework for beneficial ownership reporting, and specific regulations and guidelines have been issued by FinCEN to provide further guidance on compliance with the law.

FinCEN stands for the Financial Crimes Enforcement Network. It is a bureau of the U.S. Department of the Treasury. FinCEN’s primary mission is to safeguard the financial system from illicit activities and combat money laundering, terrorist financing, and other financial crimes.

FinCEN serves as the central authority for collecting, analyzing, and disseminating financial intelligence in the United States. It works to promote transparency and compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. The responsibilities of FinCEN include: 1. Receiving and analyzing financial transaction reports: FinCEN collects and analyzes a wide range of reports related to financial transactions, including suspicious activity reports (SARs), currency transaction reports (CTRs), and reports related to foreign bank and financial accounts (FBARs). 2. Administering and enforcing AML and CTF regulations: FinCEN plays a key role in the administration and enforcement of AML and CTF regulations, including the development of rules and guidance to ensure compliance by financial institutions and other reporting entities. 3. Maintaining financial intelligence databases: FinCEN maintains databases that store and analyze financial information to support law enforcement investigations and intelligence efforts. These databases include the Bank Secrecy Act (BSA) database and the FinCEN Query system (FinCEN Query). 4. Cooperating with domestic and international partners: FinCEN collaborates with various domestic and international partners, including law enforcement agencies, regulatory bodies, and financial intelligence units, to share information and coordinate efforts to combat financial crimes. In the context of the Beneficial Ownership Information Reporting Rule, FinCEN is responsible for implementing and overseeing the reporting requirements and providing guidance to reporting companies on compliance with the rule.

Beneficial owners are individuals who have a significant level of control or ownership over a reporting company. The term “beneficial owner” refers to any individual who meets one or both of the following criteria: 

1. Substantial Control: An individual who exercises substantial control over a reporting company. This means they have the power to make important decisions or influence the company’s operations, finances, or structure. 
2. Ownership Interests: An individual who owns or controls at least 25 percent of the ownership interests of a reporting company. This can include direct or indirect ownership or control through various arrangements, such as trusts or similar entities. 

It’s important to note that a reporting company can have multiple beneficial owners, and there is no maximum limit on the number of beneficial owners that must be reported. The reporting company is responsible for identifying and reporting the beneficial owners as part of the beneficial ownership information reporting requirements ¹.

Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 23)

The requirement to file a Beneficial Ownership Information Report (BOIR) is mandated by the Corporate Transparency Act (CTA), which was enacted to address concerns related to illicit financial activities, money laundering, and the misuse of corporate entities for illegal purposes. The BOIR requirement serves several important purposes:

1. Enhancing Transparency: The BOIR promotes greater transparency in corporate ownership by requiring reporting companies to disclose information about their beneficial owners. This helps law enforcement agencies, regulatory bodies, and financial institutions to identify and prevent illicit activities, such as money laundering, terrorist financing, and other financial crimes.
2. Closing Regulatory Gaps: Prior to the CTA, there were significant gaps in the reporting and disclosure requirements for beneficial ownership information. The BOIR requirement helps close these gaps by establishing a standardized process for reporting and maintaining accurate information on beneficial owners.
3. Facilitating Investigations: The availability of accurate and up-to-date beneficial ownership information enables law enforcement agencies to conduct more effective investigations into financial crimes. It helps to identify individuals who may be involved in illegal activities and provides a starting point for further inquiries.
4. Strengthening National Security: By requiring reporting companies to disclose their beneficial owners, the BOIR helps protect national security interests. It enables authorities to identify potential risks associated with foreign ownership or control of domestic entities and take appropriate measures to mitigate those risks.

Overall, the BOIR requirement is aimed at promoting transparency, preventing financial crimes, and safeguarding national security by ensuring that beneficial ownership information is readily accessible and properly reported.

Here are the general timelines for filing initial reports:

Existing Companies: If your company existed before January 1, 2024, you must file the initial BOI report by January 1, 2025 ¹. 

Companies Created or Registered in 2024: If your company was created or registered on or after January 1, 2024, and before January 1, 2025, you have 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective to file the initial BOI report. The 90-calendar day deadline starts from the time you receive actual notice or after a secretary of state or similar office provides public notice, whichever is earlier ¹. 

Companies Created or Registered on or after January 1, 2025: If your company is created or registered on or after January 1, 2025, you have 30 calendar days from actual or public notice of your company’s creation or registration to file the initial BOI report ². 

Additionally, if your company previously qualified for an exemption but no longer qualifies, you are required to file a BOI report within 30 calendar days of the date on which your company stops qualifying for the exemption ³.  It’s important to consult the specific regulations and guidelines applicable to your jurisdiction to ensure compliance with the filing deadlines and requirements.

Citations:1. BOI-FAQs-QA-508C.pdf(page 31); 2. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 49; 3. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 48)

A BOIR (Beneficial Ownership Information Report) needs to be amended when there are changes to the previously reported information. According to the provided sources, an updated BOI report should be filed in the following situations:

1. Changes to previously reported information about the reporting company itself or its beneficial owners 1.

2. Changes in beneficial owners, such as a new Chief Executive Officer, changes in ownership interest threshold, or the death of a beneficial owner.

3. Changes to a beneficial owner’s name, address, or unique identifying number provided in a BOI report.  Updated BOI reports should be filed within 30 calendar days after a change occurs.

Citations:1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 52); 2. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 52)

If you fail to file the required beneficial ownership information (BOI) within the specified timeframe, there may be consequences:  The Corporate Transparency Act (CTA) authorizes the imposition of civil and criminal penalties for non-compliance. Failure to file or willfully providing false or fraudulent information can result in civil penalties of up to $500 for each day that the violation continues. Willful violations can also lead to criminal penalties, including imprisonment for up to two years and/or a fine of up to $10,000 ¹

Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 22)

The Beneficial Ownership Information Reporting (BOIR) rule exempts certain types of entities from the reporting requirements. According to the Small Entity Compliance Guide, the following entities are exempt from filing a BOIR: 

1. Securities reporting issuer 
2. Governmental authority 
3. Bank 
4. Credit union 
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities 
8. Securities exchange or clearing agency
9. Insurance company 
10. State-licensed insurance producer 
11. Accounting firm 
12. Public utility 
13. Financial market utility 
14. Pooled investment vehicle 
15. Commodity Exchange Act registered entity
16. Investment company or investment adviser
17. Other Exchange Act registered entity
18. Venture capital fund adviser
19. Tax-exempt entity 
20. Entity assisting a tax-exempt entity 
21. Large operating company 
22. Inactive entity 
23. Subsidiary of certain exempt entities 

Entities that qualify for any of these exemptions are not required to submit BOI reports to FinCEN. It’s important to review the specific criteria and conditions for each exemption to determine if your entity qualifies for an exemption. For detailed information and guidance, you can refer to the Beneficial Ownership Information Reporting Requirements Small Entity Compliance Guide provided by FinCEN.

To file the Beneficial Ownership Information Report (BOIR), you will need to have the following information handy: 

Company Information:

• Full legal name of the reporting company
• Any trade names or “doing business as” (DBA) names associated with the company
• Tax Identification type and number (EIN, SSN, ITIN, etc.)
• Complete current U.S. address, including the address of the principal place of business in the United States or the primary location where the company conducts business if the principal place of business is outside the United States. State, tribal, or foreign jurisdiction of formation for the reporting company ¹. 

Beneficial Owner Information:

• Full legal name of each beneficial owner
• Date of birth of each beneficial owner
• Residential address of each beneficial owner
• An identifying number from an acceptable identification document, such as a passport or U.S. driver’s license, along with the name of the issuing state or jurisdiction of the identification document.
• An image of the identification document used to obtain the identifying number

Company Applicant Information:

• Full legal name of each company applicant.
• Date of birth of each company applicant.
• Address of each company applicant.
• An identifying number from an acceptable identification document, such as a passport or U.S. driver’s license, along with the name of the issuing state or jurisdiction of the identification document.
• An image of the identification document used to obtain the identifying number

It’s important to ensure the accuracy and completeness of the information provided. Additionally, it’s advisable to review the specific regulations and guidelines applicable to your jurisdiction to determine if there are any additional information requirements or documentation needed for the filing process.

Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 45); 2. BOI-FAQs-QA-508C.pdf(page 28); 3. BOI-FAQs-QA-508C.pdf(page 29)

A company applicant refers to an individual who is required to be identified and reported by a reporting company when filing beneficial ownership information (BOI). There are two categories of company applicants: 

1. Direct Filer: This is the individual who directly filed the document that created a domestic reporting company or first registered a foreign reporting company. They physically or electronically filed the document with the secretary of state or similar office.  For example, this may be the founder of a company, a registered agent, the paralegal who filed the incorporation documents at the attorney’s request – whomever actually filed the document.
2. Individual Who Directs or Controls the Filing Action: This is the individual who was primarily responsible for directing or controlling the filing of the creation or first registration document, even if they did not physically file the document themselves.  For example, an attorney at a law firm that offers business formation services may be primarily responsible for overseeing preparation and filing of a reporting company’s incorporation documents, instructed a paralegal to submit the filing – in this case, both the attorney and the paralegal are company applicants (one directs/controls and the other actually filed)..

It’s important to note that not all reporting companies are required to report their company applicants. The reporting requirement applies to domestic reporting companies created on or after January 1, 2024, or foreign reporting companies first registered to do business in the United States on or after January 1, 2024 ¹. The specific criteria for determining company applicants may vary based on the jurisdiction and regulations in place.

Citations: BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 40)

A company applicant is not required to be reported in a BOIR in the following situations:

1. Domestic reporting company created before January 1, 2024

2. Foreign reporting company first registered to do business in the United States before January 1, 2024

To note: Reporting requirements may vary depending on the specific circumstances and applicable regulations. It is recommended to refer to the Small Entity Compliance Guide provided by FinCEN for more detailed information and guidance.

Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 40); 2. BOI-FAQs-QA-508C.pdf(page 24)

A FinCEN ID is a unique identifying number which supports both efficiency and privacy since it can be entered on BOIRs eliminating the need for one to provide all their personal details such as their address, ID and proof of ID, date of birth, etc. 

A FinCEN ID, or FinCEN identifier, is a unique identifying number issued by the Financial Crimes Enforcement Network (FinCEN). It is assigned to individuals or reporting companies upon request after providing certain information to FinCEN. A FinCEN ID serves as a unique identifier for the purpose of reporting and tracking beneficial ownership information.  Individuals can apply for a FinCEN ID by submitting their personal information, such as their full legal name, date of birth, address, unique identifying number from an acceptable identification document, and an image of the identification document. Once the application is submitted, the individual will immediately receive a unique FinCEN ID ¹. 

Reporting companies can also request a FinCEN ID when submitting a beneficial ownership information report by checking a box on the beneficial ownership information report. After submitting the report, the company will receive a unique FinCEN ID ². The FinCEN ID is used to replace certain required personal information about individuals in beneficial ownership information reports, providing a standardized and consistent way to identify and track individuals involved in company ownership ³.Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 47); 2. BOI-FAQs-QA-508C.pdf(page 44); 3. BOI-FAQs-QA-508C.pdf(page 44)

It’s important to note that obtaining a FinCEN identifier is not mandatory for either individuals or reporting companies ³⁴.

Citations:1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 47); 2. BOI-FAQs-QA-508C.pdf(page 45); 3. BOI-FAQs-QA-508C.pdf(page 44); 4. BOI-FAQs-QA-508C.pdf(page 44)

While individuals cannot apply for a FinCEN identifier directly on the BOI (Beneficial Ownership Information) report, they can apply for a FinCEN identifier by completing an electronic web form at https://fincenid.fincen.gov ¹.  The web form will require individuals to provide their full legal name, date of birth, address, unique identifying number from an acceptable identification document, and an image of the identification document ¹. Once the individual submits this information, they will immediately receive a unique FinCEN identifier ¹.

Citations: 1. BOI-FAQs-QA-508C.pdf(page 44)

The filing of the Beneficial Ownership Information Report (BOIR) can be done by various individuals or entities authorized by the reporting company. Here are some options: 

1. Reporting Company Representatives: Individuals authorized by the reporting company, such as officers, employees, or owners, can file the BOIR on behalf of the company ¹. 

2. Third-Party Service Providers: Reporting companies may also engage third-party service providers, such as accountants, lawyers, or filing agents, to assist in the preparation and submission of the BOIR ¹. These service providers can act on behalf of the reporting company and file the BOIR as authorized representatives.  It’s important to note that while others can file the BOIR on your behalf, the responsibility for ensuring the accuracy and completeness of the information lies with the reporting company itself. It’s advisable to carefully review the information provided in the BOIR before submission to ensure compliance with the reporting requirements.  Additionally, it’s recommended to consult the specific regulations and guidelines applicable to your jurisdiction to determine any specific requirements or restrictions regarding who can file the BOIR.

Ultimately, the reporting company is responsible for ensuring the accurate and timely filing of the BOI report. If your accountant or lawyer assists you in this process, they would typically act on your behalf but not as the reporting company itself.

1. Citations: BOI-FAQs-QA-508C.pdf(page 4) Citations: 1. BOI-FAQs-QA-508C.pdf(page 25); 2. BOI-FAQs-QA-508C.pdf(page 26)

You may need to file the Beneficial Ownership Information Report (BOIR) more than once, depending on your specific circumstances. Here are a few scenarios where multiple filings may be required.

The first filing of the BOIR is typically referred to as the initial filing. This is the first time you report the required beneficial ownership information for your company. The timing of the initial filing depends on factors such as the date of company creation or registration.

Updated Reports: If there are any changes to the previously reported information about your company or its beneficial owners, you must file an updated report within 30 days of the date of the change. This ensures that the information remains accurate and up to date ¹. The following are some examples of the changes that would require an updated beneficial ownership information report:

• Any change to the information reported for the reporting company, such as registering a new business name.
• A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent
• Any change to a beneficial owner’s information such as name, address, or unique identifying number previously provided to FinCEN. If a beneficial owner obtained a new driver’s license or other identifying document that includes a changed name, address, or identifying number, the reporting company also would have to file an updated beneficial ownership information report with FinCEN, including an image of the new identifying document.
• Exemption Changes: If your company previously qualified for an exemption from the reporting requirements but no longer qualifies for that exemption, you may need to file a BOIR within 30 calendar days of the date on which your company stops qualifying for the exemption ².
• Newly Exempt Entity Report: If your company filed a BOIR but later becomes exempt from filing the report, you should file an updated report indicating that your company is no longer a reporting company. This report only requires you to identify the entity and check a box noting its newly exempt status ³. It’s important to review the specific regulations and guidelines applicable to your jurisdiction to determine the exact filing requirements and timelines based on your unique situation.

Citations:

1. BOI-FAQs-QA-508C.pdf(page 34); 2. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 50); 3. BOI-FAQs-QA-508C.pdf(page 37);

FinCEN’s Small Entity Compliance Guide provides additional guidance on triggers requiring an updated beneficial ownership information report (see Chapter 6.1 “What should I do if previously reported information changes?”).

The responsibility for filing the Beneficial Ownership Information Report (BOIR) lies with the reporting company. As the reporting company, it is your responsibility to ensure compliance with the reporting requirements and to submit the necessary information to the appropriate regulatory authority, such as the Financial Crimes Enforcement Network (FinCEN) in the United States. While the reporting company is responsible for filing, it may designate individuals or authorized representatives to complete and submit the BOIR on its behalf. These individuals could include officers, employees, or authorized agents of the reporting company. However, the ultimate responsibility for filing and the accuracy of the information provided rests with the reporting company itself. It’s important to note that the specific regulations and guidelines may vary based on the jurisdiction and applicable laws. It is recommended to consult the relevant regulations and guidelines specific to your jurisdiction to ensure compliance with the reporting requirements and to determine any specific requirements regarding authorized filers or representatives.

As an officer in your company but not an owner, you may still need to file if you meet certain criteria. According to the Beneficial Ownership Information (BOI) Reporting Rule, officers who perform functions similar to those of a president, chief financial officer, general counsel, chief executive officer, or chief operating officer are considered substantial control individuals and may be required to file 1. However, it’s important to note that filing requirements depend on whether your company meets the definition of a “reporting company” and if any exemptions apply 2. To determine your specific filing obligations, you should consult the BOI Reporting Rule and the Small Entity Compliance Guide provided by FinCEN.

Citations: 1. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 27) 2. BOI_Small_Compliance_Guide.v1.1-FINAL.pdf(page 8)

No. Any company that meets the definition of a reporting company and is not exempt is required to file its own BOI report.

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