Corporate Transparency Act
Question: Does our company need to report beneficial ownership information to the U.S. Department of the Treasury?
Answer: Pursuant to the Corporate Transparency Act (“CTA”) that went into effect in the US on January 1, 2024, reporting companies need to provide its beneficial ownership information to Financial Crimes Enforcement Network (“FinCEN”) though a designated e-filing website. A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial report.
A foreign company (i.e., a company not formed under the US laws) may be a reporting company for the purposes of the CTA, if it has registered to do business in any of the US States by filing a document with the secretary of state or similar office.
Information that needs to be provided to FinCEN refers to identifying information about the individuals who directly or indirectly own or control the company. The relevant individuals are either those who (a) directly or indirectly own at least 25% of the reporting entity or (b) exercise “substantial control” over the reporting entity. “Substantial control” may mean any of the following:
o Is a senior officer (for example, president, CEO, GC, CFO, COO)
o Has authority to appoint or remove senior officers or majority of directors
o Is an important decision-maker (directs or has substantial influence overimportant decisions, such as business, finances, structure of the entity)
o Has other form of substantial control
Reporting companies need to file an initial beneficial ownership information report only once and then correct or update it as needed, if there is any change in the information originally submitted.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
Question: Does our company need to report beneficial ownership information to the U.S. Department of the Treasury?
Answer: Pursuant to the Corporate Transparency Act (“CTA”) that went into effect in the US on January 1, 2024, reporting companies need to provide its beneficial ownership information to Financial Crimes Enforcement Network (“FinCEN”) though a designated e-filing website. A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial report.
A foreign company (i.e., a company not formed under the US laws) may be a reporting company for the purposes of the CTA, if it has registered to do business in any of the US States by filing a document with the secretary of state or similar office.
Information that needs to be provided to FinCEN refers to identifying information about the individuals who directly or indirectly own or control the company. The relevant individuals are either those who (a) directly or indirectly own at least 25% of the reporting entity or (b) exercise “substantial control” over the reporting entity. “Substantial control” may mean any of the following:
o Is a senior officer (for example, president, CEO, GC, CFO, COO)
o Has authority to appoint or remove senior officers or majority of directors
o Is an important decision-maker (directs or has substantial influence overimportant decisions, such as business, finances, structure of the entity)
o Has other form of substantial control
Reporting companies need to file an initial beneficial ownership information report only once and then correct or update it as needed, if there is any change in the information originally submitted.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
