IMPORTANT TWSG CLIENT NOTICE:
On January 1, 2024 the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) began accepting beneficial ownership reports related to the newly enacted Corporate Transparency Act (“CTA”). CTA impacts virtually everyone who owns an interest in any type of nonpublic company and requires most companies to file certain disclosure information with the FinCEN identifying the principal owners of the company and other key persons who make decisions for the company, such as senior management and directors. Most nonpublic companies are affected regardless of the type of business entity, including limited liability companies (LLCs), corporations, and limited partnerships (but note that general partnerships are excluded). For companies formed prior to January 1, 2024, you have until January 1, 2025 to file the required report.
The CTA requires all covered companies to:
report certain “beneficial ownership information” (“BOI”) to the US Department of the Treasury’s Financial Crimes Enforcement Network; [1] and
report (within specified time period) any changes to previously reported information.
This notice is solely to notify you regarding the new CTA reporting obligations that we believe may apply to you and your company(ies); however, it is not intended to, and does not, provide legal, compliance, or other advice to any individual or company.
Please reach out to us at cta@twsglaw.com if you have questions or would like our assistance with your CTA reporting obligations.
!!!IMPORTANT!!!! Not surprisingly, FinCEN is aware of fraudulent attempts to solicit information from individuals and companies that may be subject to CTA reporting requirements. The fraudulent correspondence may be titled "Important Compliance Notice" or similar, and may ask the recipient to click on a URL or scan a QR code. FinCEN does not send unsolicited reporting requests. Please do not respond to these fraudulent messages or click on links or scan QR codes within them.
WHAT YOU NEED TO DO TO FULFILL YOUR CTA REPORTING OBLIGATIONS
Determine whether your company is a “reporting company” under the CTA. If you own any company (or interest in a company), it is highly likely the company is required to report. While there are a few narrow exemptions, most companies, regardless of the form of business entity, will not be exempt and will be required to report.
If your company is a covered reporting company, you are required to file the Beneficial Ownership Information report. Every reporting company is required to file its own separate report, even if you have more than one company under identical ownership. As you probably suspect, violating the CTA reporting requirement may result in civil and criminal penalties for any person willfully failing to comply.
Determine what information your company will need to provide, including information about the company and each person who is deemed to be a “Beneficial Owner”. Each reporting company will need to provide its full legal name, trade names, address, state of formation and taxpayer identification number. Each beneficial owner will need to provide his/her/its full legal name, date of birth, complete residential address, unique identifying number from a US passport or state ID or drivers’ license, and an image of the identification document bearing this identification number.
If you would like to review the CTA reporting requirements and electronically file the required BOI reports through FinCEN’s new BOI E-Filing you can do so here: www.fincen.gov/boi.
Alternatively, if you would like our assistance with your CTA reporting obligations, please complete the CTA Compliance Form for each of your companies and email it to cta@twsglaw.com along with copies of each beneficial owner’s Passport, State Drivers’ License, or State ID or email Betsy Odell at cta@twsglaw.com if you would like to make arrangements to provide this information via a secure link. Our team will review the information you provide and will work with you to fulfill your CTA obligations. You should be aware that while there is no specific requirement to amend LLC operating agreements, limited partnership agreements, corporate articles of incorporation or bylaws, or shareholder agreements, there could be reasons to do so, and we can discuss that as well, if you would like.
We understand that these kinds of new government reporting requirements are always unwelcome and rest assured that our team is here to help. Please understand that we cannot provide a blanket cost estimate for completing the necessary reporting procedures because cost will vary depending on individual circumstances. That said, if your company is able to readily provide the needed information, the filing will not be difficult and the cost should not be burdensome.
As always, if you have any questions and would like to discuss this situation, please do not hesitate to contact the TWSG attorney with whom you work most closely.
[1] The reporting requirement is to facilitate “transparency” regarding key company persons, and is intended to combat illegal activities that occur through the use of anonymous shell and front companies. The reporting requirement applies to every covered company and does not mean that you or your company are suspected of illegal activities. Note that the BOI is confidential and will not be available to the public but may be disclosed by FinCEN to security, law enforcement, and intelligence agencies; financial institutions; and the US Department of Treasury.