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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On September 30, 2022, the Financial Crimes Enforcement Network of the Department of the Treasury (FinCEN) finalized regulations to implement the Corporate Transparency Act (CTA), originally passed under the 2021 National Defense Authorization Act. The CTA establishes uniform reporting requirements for certain business entities created in or registered to do business in the United States and authorizes FinCEN to collect and disclose information to authorized government authorities and financial institutions in order to assist law enforcement to combat corruption, money laundering, terrorist financing, tax fraud, and other illicit activity. The regulations will be effective starting January 1, 2024.

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The rule identifies two types of&nbsp;reporting companies:&nbsp;domestic and foreign.

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The CTA exempts from the definition of “reporting company” 23 specific types of entities. Many of these exempt entities are already subject to substantial federal and/or state regulation or already have to provide their beneficial ownership information to a governmental authority. For example, specific exemptions are provided for:

While the FinCEN forms and instructions are not yet available, the regulations require that the report must include information concerning the company, the “beneficial owners” of the company and, for entities formed after January 1, 2024, the “company applicant.”

The company information required to be reported includes: (a) the company’s full legal name and any d/b/a names, (b) street address of its principal place of business, (c) jurisdiction of formation or registration, and (d) tax identification number (or, if a TIN has not been issued, alternatives include a <a>Dun &amp; Bradstreet Data Universal Numbering System (DUNS) number</a> or <a>Legal Entity Identifier number</a>).

The information required to be reported for a “beneficial owner” of the reporting company includes: (a) full legal name, (b) date of birth, (c) current residence street address, and (d) a unique identifying number from an acceptable identification document (e.g., driver’s license or passport) and image of such document which includes both the identifying number and photograph. Beneficial owners may alternatively provide their FinCEN identifiers (unique identifying numbers that FinCEN issues to individuals or entities upon request).

For entities formed after January 1, 2024, <a>the information required for a “company applicant” includes </a>the same information required for a beneficial owner, except a company applicant who forms an entity in the course of the applicant’s business may use the street address of such business. For entities formed prior to January 1, 2024, the information required for a “company applicant” does not include any details of the company applicant other than to report that the reporting company was created before January 1, 2024.

The deadline for submitting reports under the CTA depends on the formation date of the reporting company:

For entities that need to update their information, or for entities that have previously been exempt from reporting but are no longer exempt, changes in information must be filed within 30 days of the change. If a reporting company needs to make a correction, the updated report must be filed within 30 days of the date the entity knew or should have known the information was inaccurate.

Who Will Be Able to Access This Information?

The CTA does not permit public access to information concerning beneficial owners. On December 15, 2022, FinCEN issued a Notice of Proposed Rulemaking for public comment on its proposed rules governing access and safeguarding of information concerning beneficial owners to be finalized prior to the January 1, 2024 effective date. FinCEN proposed limiting access to information concerning beneficial owners to the following groups and purposes:

Those who are or may be impacted by the CTA and its mandated reporting requirements should start planning now and establish a process for initial reporting and any subsequent reports, noting the very short 30-day filing window.

Please contact <a href="https://www.thompsonhine.com/professionals/paul-allaer/">Paul Allaer</a>, <a href="https://www.thompsonhine.com/professionals/mark-a-conway/">Mark Conway</a> or <a href="https://www.thompsonhine.com/professionals/ashley-a-weyenberg/">Ashley Weyenberg</a> if you have any questions.

https://admin.thompsonhine.com/wp-content/uploads/2023/03/Business-Law-Update-March-2023.pdf

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This newsletter may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgement of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

Corporate Transparency Act Requires Filing Reports with FinCEN in 2024

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