TheCorporateCounsel.net

Last Thursday, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the beneficial ownership information reporting provisions of Corporate Transparency Act. FinCEN adopted the final rule largely as proposed in December 2021. As John noted when the rule was proposed, the regulations create a new federal filing requirements applicable to a wide range of entities (including operating companies, holding companies, LLCs and others). The goal of the new rule is to enhance FinCEN’s ability to protect national security and the financial system, by providing information that can be used by national security, intelligence, and law enforcement agencies. The effective date for the rule is January 1, 2024.

As this KPMG Regulatory Alert notes, the final rule outlines who is required to submit a beneficial ownership information report, as well as when and what information is required. Subject to certain exemptions, corporations, limited liability companies, and entities formed with (or registered to do business with) any secretary of state or similar office of a state or Native American tribe will be required to report specific information about their beneficial owners and individuals who filed the application to form the entity or registered it to do business.

Reporting companies created or registered before January 1, 2024 will have one year (until January 1, 2025) to file their initial reports, while reporting companies created or registered after January 1, 2024 will have 30 days after receiving notice of their creation or registration to file their initial reports. FinCEN indicates that it will publish for comment the reporting forms that will be used to comply with the reporting obligations under the new rule.

– Dave Lynn