Corporate Transparency Act: Information to be Reported


December 7, 2023

By: Eric R. Tubbs, Wesley M. Greder

Part of broad anti-money laundering and antiterrorism measures taken by Congress, the Corporate Transparency Act (CTA) requires certain entities to report specific information related to ownership and control of the business. In the fourth in the series about the CTA, the details of the information to be reported are outlined.

 

What Does the CTA Require from a Reporting Company?

Reporting companies must disclose information in their beneficial ownership information (BOI) report to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN)  regarding the company, beneficial owners, and company applicants. For the reporting company itself, FinCEN requires the following information:

  • Full legal name;
  • Trade names and “doing business as” names;
  • Current physical address (a P.O. box cannot be used);
  • State, tribal, or foreign jurisdiction of formation (and for foreign entities the state or tribal jurisdiction where it first registered in the United States); and
  • IRS Taxpayer Identification Number (TIN) (including Employer Identification Number)

 

The address to be listed is the principal office address of the reporting company. In the event such address is not located in the United States, the reporting company shall list the address of the primary U.S. location where it conducts business.

 

If a foreign reporting company has not been issued a TIN, it must list its tax identification number issued by a foreign jurisdiction.

 

What Details Are Required About Beneficial Owners and Company Applicants?

In identifying a reporting company’s beneficial owners and company applicants, the company must disclose the following information for these individuals:

  • Full legal name;
  • Date of birth;
  • Current residential address (except that a business address may be used for company applicants who form or register entities in the course of their business);
  • Unique identifying number from one of the following:
    1. A U.S. passport,
    2. A state, local, or Indian tribal identification document,
    3. A state-issued driver’s license, or
    4. If an individual does not have any of the other types of identification, a passport issued by a foreign government;
  • An image of the identification document from which the unique identifying number was obtained.

 

For beneficial owners, a residential address must be listed. This is an important distinction from company applicants which, if forming or registering a reporting company in the course of their business (e.g., an attorney or corporate formation agent), shall list the address of the company applicant’s business (which need not be a U.S. address).

 

An important exemption in listing beneficial owners concerns exempt entities. If an exempt entity has an ownership interest (direct or indirect) in a reporting company and an individual is a beneficial owner of the reporting company exclusively by virtue of the individual’s ownership in the exempt entity, the reporting company may choose to list the legal name of the exempt entity rather than BOI for the individual beneficial owner. For example, Company X holds 80 percent of the stock of Company Y and Owner A is a beneficial owner of Company Y by virtue of her ownership in Company X. If Company X is exempt from being a reporting company, Company Y may simply list “Company X” on its report rather than listing BOI for Owner A.

 

What Is a FinCEN Identifier?

For reasons including administrative ease and privacy concerns, individuals may obtain from FinCEN what is known as a “FinCEN Identifier.”

 

In order to obtain a FinCEN Identifier, the individual must provide to FinCEN the same information a reporting company would be required to report for such individual. When filing its BOI report for the individual beneficial owner, the reporting company may then simply list this FinCEN Identifier rather than fill out all the required information about the individual. The reporting company itself may also request a FinCEN Identifier when submitting its initial BOI report.

 

Use of a FinCEN Identifier for BOI reporting is convenient for individuals likely to be listed as a beneficial owner or company applicant of multiple reporting companies. This administrative ease could be beneficial for executives at companies with multiple subsidiaries, investors in multiple companies, and attorneys or formation service agents.

 

Individuals may also choose to obtain a FinCEN Identifier if they are more comfortable disclosing personal information directly to FinCEN (which maintains a non-public database of BOI) rather than through disclosure to individuals at the reporting company.

 

Within 30 days of any change in reported information, an individual using a FinCEN Identifier must file an updated application with FinCEN and must correct any inaccuracies within 30 days of becoming aware of such.

 

Go to Nyemaster’s Corporate Transparency Act Information Hub for full discussions of the CTA and its requirements for reporting companies, exempt entities, company applicants, and beneficial owners.

 

Learn more about your obligations under the CTA with each article in the series:

 

Contact your Nyemaster attorney to discuss the CTA and the obligations it imposes on your business.