On Apr. 18, FinCEN updated FAQs regarding beneficial ownership.
FinCEN added several Frequently Asked Questions (FAQs) on beneficial ownership information (BOI) requirements; follows new Jan. 2024 FAQs, see #197638.
Applicability
FinCEN updated FAQ D. 1. on who is a beneficial owner of a reporting company.
FAQ C. 8. confirmed that BOI reporting requirements apply to S-Corporations/
Also FAQ. C. 9 confirmed that a domestic corporation or LLC that is not created by the filing of a document with a secretary of state is not reporting company subject to BOI.
FAQ C. 10. clarifies that applicability for homeowners associations depends on facts.
This is because Homeowners associations (HOAs) can take different corporate forms.
FAQ D. 13. clarifies who is the beneficial owner of a homeowners association.
Trusts
FAQ D. 14. clarified that owners who own or control reporting companies through trusts can be beneficial owners if exercising substantial control over reporting company
FAQ D. 15. explains who are the beneficial owners when individuals own or control the company through trust; and FAQ D. 16. how to report corporate trustee as beneficials.
Reporting
FAQ F. 12. clarifies what address a reporting company should report if it lacks principal place of business in US; it should report primary location where it does business in US
If it conducts business at more than one location within the US, then the reporting company may report as its primary location the address of any of those locations.
Exemptions
FAQ G. 6. states that reporting company has 30 calendar days to file initial report after it loses its exempt status, but if created before Jan. 1, 2024 has until Jan. 1, 2025.
FAQ L. 7. If the size of a reporting company fluctuates above and below one of the thresholds for the large operating company exemption, it has to report if meets criteria
Penalties
FAQ K. 2. covers penalties do individuals face for violating BOI reporting requirements.
Person who willfully violates BOI reporting requirements may be subject to civil fines of up to $500 for each day that the violation continues; amounts adjusted annually.
If willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000 dollars.
Access to BOI
FAQ O. 1. states that authorized recipients will have access to beneficial ownership information based on a phased approach, with first phase to begin in the spring 2024.
Access will begin as a a pilot program for a handful of Federal agency users.
The second phase, expected in the summer of 2024, will extend access to Treasury offices and other Federal agencies engaged in law enforcement and national security.
The third phase, expected in the fall of 2024, extends access to more agencies.
The fourth phase, which is expected in the winter of 2024, will extend access to intermediary Federal agencies in connection with foreign government requests.
The fifth phase, expected in the spring of 2025, will extend access to financial institutions subject to customer due diligence requirements under applicable law.
FAQ O. 3. explains which state agencies can request beneficial ownership information.
FAQ O. 4. confirms that foreign governments cannot directly access the beneficial ownership IT system—the secure system that FinCEN uses to receive and store BOI.
However, they will be able to request BOI through intermediary Federal agencies.
FAQ O. 5. explains how prepare to receive, store, and use beneficial ownership data.
Apr. 2024 FinCEN Beneficial Owner Webinar
On Apr. 29, 2024, FinCEN reported that it will host a webinar on beneficial ownership.
Will cover reporting requirements, compliance with the Corporate Transparency Act.
Provided resources for small businesses including brochure, referenced updated FAQs.
Regulators
FinCEN
Entity Types
B/D; Bank; Corp; Depo; Fiduciary; Ins; MSB
Reference
PR 4/29/2024; FAQs, Gd, 4/18/2024
Functions
AML; Anti-Bribery; Compliance; C-Suite; Financial; Legal; Operations; Record Retention; Reporting
