UNVEILING THE VEIL: NAVIGATING THE CORPORATE TRANSPARENCY ACT PDF Free Download
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UNVEILING THE VEIL:
NAVIGATING THE CORPOR ATE
TRANSPARENCY ACT
BENEFICIAL OWNERSHIP
INFORMATION REPORTING
(2024)
Frank Orlando, Member
Accumera LLC
518-937-9117
AGENDA
1. About The CTA
2. Requirements
3. Exemptions
4. Deadlines & Penalties
5. Solutions
6. Questions?
Accumera LLC – CTA/BOIR (2024) 2
Disclaimer:
The content of this presentation is for informational
purposes only and should not be taken as legal
counsel. For advice on varied situations, please seek
the expertise of a licensed attorney.
ABOUT THE CTA
INTRODUCTION
The Corporate Transparency Act (“CTA”) requires
certain business entities (defined as a “reporting
company”) to file, information on their “beneficial
owners” with the Financial Crimes Enforcement
Network (“FinCEN”). The information will not be
publicly available, but FinCEN is authorized to
disclose the information to certain “authorized”
agencies and other persons.
4
I M PAC T
SMALL BUSINESSES
•An estimated 33 Million entities will need
to file their initial reports in 2024
•Outreach by FinCEN, lack thereof
•General public may not be aware yet and
are relying on certain professional to
advise them
•Time consuming and costly
PROFESSIONALS (TAX & LEGAL)
•Notify clients of requirement
•Small Businesses may expect advice from
their tax/legal professional.
•Should be prepared to answer questions
about the CTA and BOIR
•Provide recommendations to comply
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IMPORTANT TERMS
•Reporting Company (Domestic & Foreign)
•Beneficial Owner (25% or More Interest -and/or-Substantial Control)
•Company Applicant (Direct Filer -or-Individual that Directs or Controls the Filing Action)
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ACRONYMS
•CTA –Corporate Transparency Act
•BO –Beneficial Owner
•BOI –Beneficial Ownership Information
•BOIR -Beneficial Ownership Information
Report
•PII –Personally Identifiable Information
•UBO –Ultimate Beneficial Ownership
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•FinCEN –Financial Crimes Enforcement
Network
•AML – Anti Money Laundering
•FATF – Financial Action Task Force
REQUIREMENTS
BOIR REQUIREMENTS
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WE WILL DISCUSS:
-WHAT IS A REPORTING COMPANY?
-WHO IS A BENEFICIAL OWNER?
-WHO IS A COMPANY APPLICANT?
-REPORTED INFORMATION?
-FINCEN IDENTIFIERS
REPORTING COMPANY
•Domestic
•Foreign
•FinCEN Definition
Accumera LLC – CTA/BOIR (2024) 10
TYPES
BENEFICIAL OWNER
A beneficial owner is any individual who, directly or indirectly:
•Owns or controls at least 25 percent of the Ownership Interests of a reporting company.
-OR-
•Exercises Substantial Control over a reporting company
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WHO IS A BENEFICIAL OWNER?
OWNERSHIP INTEREST
•FinCEN Definition
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25 PERCENT OR MORE
SUBSTANTIAL CONTROL
•FinCEN Definition
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SENIOR OFFICERS,
DECISION MAKERS, ETC.
EXEMPTION FROM BO DEFINITION
1. Minor Child
2. Nominee, intermediary, custodian, or agent
3. Employee
4. Inheritor
5. Creditor
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THERE ARE FIVE EXCEPTIONS TO THE DEFINITION OF BENEFICIAL OWNER.
COMPANY APPLICANT
There are two categories of company applicants:
•Direct Filer (person that personally submits filing that creates the registration)
ex. Attorney, Service Company, etc.
•Individual that Directs or Controls the Filing Action
ex. Attorney, Tax Professional, BO, etc.
Note: Applicants only need to be reported on companies registered on or after January 1, 2024
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WHO IS A COMPANY APPLICANT?
COMPANY APPLICANT CONTINUED
Example 1: Individual A is creating a new company. Individual A prepares the
necessary documents to create the company and files them with the relevant State or
Tribal office, either in person or using a self-service online portal. No one else is
involved in preparing, directing, or making the filing.
Example 2: Individual A is creating a company. Individual A prepares the necessary
documents to create the company and directs Individual B to file the documents with
the relevant State or Tribal office. Individual B then directly files the documents that
create the company.
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EXAMPLES OF WHO TO REPORT:
REPORTED INFORMATION
•Reporting Company Information
•Beneficial Owner Information
•Company Applicant Information
•Special Reporting Rules
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WHAT INFORMATION NEEDS TO BE REPORTED?
REPORTING COMPANY
INFORMATION
•Full Legal Name
•Any Trade or DBA names
•Complete US physical address of the principal place of business or address where the
company conducts business in the US
•Jurisdiction of Formation or First Registration in the US
•If a foreign reporting company, jurisdiction outside the US where the company was organized
•IRS EIN/TIN. (foreign reporting company exception)
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WHAT INFORMATION NEEDS TO BE REPORTED FOR THE COMPANY?
BENEFICIAL OWNER INFORMATION
•Full Legal Name
•Date of Birth
•Complete US physical RESIDENCE address (not required to be in the US)
•Non-Expired Identification (US Passport, US State Drivers License, US or Foreign Passport)
-Unique identifying number
-Issuing Jurisdiction
-Image of identification
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WHAT INFORMATION NEEDS TO BE REPORTED FOR THE BO?
COMPANY APPLICANT INFORMATION
•Full Legal Name
•Date of Birth
•Complete US physical BUSINESS and/or RESIDENCE address (not required to be in the US)
•Non-Expired Identification (US Passport, US State Drivers License, US or Foreign Passport)
-Unique identifying number
-Issuing Jurisdiction
-Image of identification
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WHAT INFORMATION NEEDS TO BE REPORTED FOR THE APPLICANT?
SPECIAL REPORTING RULES
•Owned by exempt entity
•Minor child
•Foreign pooled investment vehicle
•Company applicant reporting for existing companies
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FOUR SPECIAL REPORTING RULES:
FINCEN IDENTIFIERS
•A “FinCEN identifier” is a unique identifying number that FinCEN will issue to an individual or
reporting company upon request after the individual or reporting company provides certain
information to FinCEN
•Information required to apply is the same as would be reported as a reporting company, BO
or Applicant
•Benefits
-Not providing your PII to reporting companies
-Update your information in one place
-Not required to file amended BOIR to update BO or applicant address or expired ID
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WHAT IS A FINCEN IDENTIFIER:
EXEMPTIONS
EXEMPTIONS
•The Reporting Rule does exempt twenty-three (23) specific types of entities from the
reporting requirements
•An entity that qualifies for any of these exemptions is not required to submit BOI reports to
FinCEN.
•Accumera has created a Reporting Wizard to confirm if you are a Reporting Company and
determine if you can claim any of the Exemptions
https://accumera.com/order-online/boi-reporting-company-exemption-wizard/
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CAN MY COMPANY CLAIM AN EXEMPTION TO THE BOIR REQUIREMENT:
EXEMPTIONS CONTINUED
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firm
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity
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23 EXEMPTIONS:
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. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
DEADLINES &
P E NA LT I E S
DEADLINES, UPDATES & PENALTIES
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WE WILL DISCUSS:
-DEADLINES FOR FILING
-WHEN TO FILE BOIR UPDATES
-ASSOCIATED PENALTIES
-WHO HAS ACCESS TO THE BOI INFORMATION
DEADLINES FOR FILING
•Reporting began on January 1, 2024
•Entities formed before January 1, 2024 have until January 1, 2025
•Entities formed on or after January 1, 2024 have to file within 90 days*
*The 90-day extension only applies to those new entities filed through December 31, 2024. At
this time, new entities formed January 1, 2025, and onward will have 30 days to file.
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WHEN DO I NEED TO FILE?
BOIR UPDATES
•Updated Reports – (file within 30 days of change) report updates a previously filed BOI
Report, for example, to include one or more new beneficial owners, updated beneficial owner
details, new address or a new DBA
•Corrected Reports – (file within 30 days after the date your company became aware of the
inaccuracy) report corrects inaccurate information from a previously filed BOI Report
•Newly Exempt Entity – (no time frame stipulated) if, after having filed a BOI Report, the
reporting company is now exempt from BOI reporting requirements an exempt entity report is
filed to claim the exemption
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WHEN DO I NEED TO FILE ANOTHER BOIR?
P E NA LT I E S
•Civil penalties:$500 / day, up to $10,000 (per entity)
•Criminal penalties*: Up to two years imprisonment
•Individuals may also be subject to civil or criminal penalties for willfully causing a company
not to file a required BOI report, by withholding information, or by providing incomplete or
false information.
•Corporate Transparency Act creates a safe harbor from penalty if company voluntarily
submits updated report within 90 days of the deadline of the original report
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WHAT IF I DO NOT COMPLY WITH THE BOIR REQUIREMENT?
ACCESS TO THE BOI INFORMATION
•US Federal government agency
•State, local, and Tribal law enforcement agency
•Foreign requesters
•Financial institutions
•Federal functional regulators
•Treasury personnel
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THE BOI ACCESS RULE STATES THAT THE FOLLOWING HAVE ACCESS TO BOIR DATA:
SOLUTIONS
SOLUTIONS
•Accumera LLC
-Collect required data and submit application ($125 per filing, includes 4 BOI’s)
https://accumera.com/order-online/beneficial-ownership-reporting/
-CTA information and updates, https://accumera.com/cta
-https://accumera.com/order-online/boi-reporting-company-exemption-wizard/
-24-hour secure access to orders via online portal, https://login.accumera.com/
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IS THERE HELP AVAILABLE?
QUESTIONS?
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QUESTIONS
•What will Accumera do for our clients who must file the BOI?
•What is the approximate cost to initially file and then to keep the BOI updated if changes
made?
•What allows Accumera to prepare the BOI when either my E & O insurance or the
unauthorized practice of law prohibits me from preparing it?
•Will I, as the tax professional be involved, or just client and Accumera?
•Why is it better for Accumera to do this instead of me?
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TAX FELLOWSHIP QUESTIONS:
QUESTIONS
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WEBINAR CHAT QUESTIONS:
