Column: Navigating the latest Financial Crimes Enforcement Network reporting mandates

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Commentary by Lisa Dillman

With the goal of enhancing transparency and reducing financial crimes, the Financial Crimes Enforcement Network (FinCEN) has unveiled a definitive ruling to enforce the beneficial ownership reporting mandates outlined in the Corporate Transparency Act (CTA). This final rule marks a pivotal step in reshaping the regulatory landscape, and expands transparency measures to combat money laundering, tax fraud and other illicit financial activities.

This legislation, which came into effect Jan. 1, 2024, introduces reporting requirements for Family Partnerships, Limited Liability Companies (LLCs) and corporations. The CTA mandates the disclosure of ownership and management details, targeting entities operating within or accessing the U.S. market.

For individuals or businesses with an LLC, partnership, or corporation, it’s important to be aware of this new regulation and its requirements.

Reporting deadlines and requirements

For Reporting Companies established or registered on or after Jan. 1, 2024, reports must be filed within 30 calendar days of either the entity’s effective registration or the Secretary of State’s public notice. Those created before that date must file reports by Jan. 1, 2025. The required information includes the entity’s full legal name, trade name, current address, jurisdiction and IRS taxpayer identification number.

Beneficial owners and company applicants must provide comprehensive details, such as their full legal name, date of birth, residential address, a non-expired U.S. identification document or a foreign passport.

What is considered a Reporting Company?

“Reporting Companies” encompasses any domestic entity formed or any foreign entity registered to do business in any state within the United States – subject to 23 enumerated exemptions, which can be found here: fincen.gov/boi-faqs in section C2.

Who are Beneficial Owners?

Beneficial owners are any individuals who directly or indirectly (a) exercise substantial control of a reporting company or (b) own or control at least 25 percent of the ownership interest in a Reporting Company. The term “substantial control” under the reporting requirements encompasses senior officers and individuals influencing crucial decisions within a Reporting Company.

Who are company applicants?

Company applicants are certain individuals who file or help to prepare the documents that create the reporting company or qualify it to do business. This can include attorneys, accountants and other third-party professionals who may assist in the business formation process. 

Reporting process and secure filing system

Entities required to report their beneficial ownership information will do so electronically through FinCEN’s BOI E-Filing website (boiefiling.fincen.gov). Authorized individuals, including employees, owners, or third-party service providers, may file on behalf of Reporting Companies. Filers need to provide basic contact information, such as name and email address or phone number, during the submission process.

If you’re unsure about navigating this new regulation, seek out the help of an estate planning attorney. An estate planning attorney can help individuals and business owners understand whether their entities fall under reporting obligations, can help decipher exemptions and streamline the reporting process. By engaging with a knowledgeable professional, individuals can not only meet their compliance obligations but also gain insights into optimizing their entity structures within the bounds of the law.

Information was obtained from the Financial Crimes Enforcement Network website (fincen.gov/boi-faqs).

Lisa Dillman is an attorney at Applegate & Dillman Elder Law. The firm has offices in Indianapolis, Carmel, and Zionsville. Find out more at applegate-dillman.com.


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