What you need to know

What You Need to Know about the CTA

• All reporting companies must file a report with FinCEN that contains the required information about each of its beneficial owners.

• A reporting company formed after the effective date of the rule must include in its FinCEN report the required information for the reporting company’s applicant.  An applicant is the individual who files the document with a state or Indian Tribe that created the reporting company.

• If any information filed in a FinCEN report changes the reporting company must report the change to FinCen not later than thirty days after the date of the change.

• A person who (i) willfully provides, or attempts to provide, false or fraudulent beneficial ownership information, including a false or fraudulent identifying photograph or document; or (ii) willfully fails to report, complete or update beneficial ownership information may be fined up to $500 for each day that the violation continues or has not been remedied and may be fined up to $10,000, imprisoned for two years, or both.  NOTE:  These penalties are the reason ALL REPORTING COMPANIES AND APPLICANTS MUST TIMELY FILE ACCURATE REPORTS WITH FINCEN. 

• More than 90% of U.S. companies (including your companies) are reporting companies that must file with FinCEN. A reporting company is a for profit corporation, limited liability company and a similar entity formed by filing a document with a secretary of state’s office — or equivalent or an Indian Tribe or a foreign entity registered to do business in the United States.

• An entity is not a reporting company if it: (1) employs more than 20 employees on a full-time basis in the United States, filed a prior year U.S. federal income tax return that reported more than $5,000,000 in gross receipts or sales, including the receipts or sales of other entities owned by the entity and other entities through which the entity operates and has an operating presence at a physical office within the United States, (2) is a bank or credit union, (3) is an insurance company, or (4) is a public utility.  There are many other types of entities that are excluded from the definition of a reporting company. 

• Reporting companies must disclose to FinCEN the required information about each beneficial owner.  A beneficial owner is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise (i) exercises substantial control over the entity; or (ii) owns or controls not less than 25 percent of the ownership interests of the entity. 

• The following is the required information about each beneficial owner that the reporting company must disclose to FinCEN: (i) full legal name, (ii) date of birth, (iii) the beneficial owner’s residential or business street address as of the date the report is delivered to FinCEN; and (iv) the unique identifying number from the beneficial owner’s acceptable identification document or the beneficial owner’s FinCEN identifier number. 

• An acceptable identification document is one of the following: (A) a nonexpired passport issued by the United States; (B) a nonexpired identification document issued by a State, local government, or Indian Tribe to the individual acting for the purpose of identification of that individual; (C) a nonexpired driver’s license issued by a State; or (D) if the individual does not have a document described in (A), (B), or (C), a nonexpired passport issued by a foreign government.