As of January 1, 2024, many companies in the United States will have to report information about their beneficial owners — the individuals who ultimately own or control the company. Below are questions and answers to help inform bank colleagues and our customers. The best tool to help our customers understand the Beneficial Ownership reporting is the website (Beneficial Ownership Information Reporting | FinCEN.gov) set up by FinCen, it contains a FAQ, the Small Entity Compliance Guide, and Informational Videos. Attached is a brochure please feel free to give to customers.
Q: What is the Beneficial Ownership Information Reporting Rule?
A: The Beneficial Ownership Information Reporting Rule, created by the Corporate Transparency Act, requires reporting companies to report information about their beneficial owners and company applicants to FinCEN. A beneficial owner is an individual who owns or controls at least 25% of a company or has substantial control over the company. A company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company. Reporting begins January 1, 2024
Q: Who must report?
A: Unless specifically exempt from the rule, if your company is:
- a corporation, LLC, or was otherwise created in the United States by filing a document with the secretary of state or similar office under the law of a state or Indian Tribe; or
- a foreign company and was registered to do business in any U.S. state or Indian tribe by such filing, you must file beneficial ownership information with FinCEN. A company required to report beneficial ownership information to FinCEN is referred to as a reporting company.
Q: When do I need to report my company’s beneficial ownership information to FinCEN?
A:
- A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report.
- A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
- Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.
Q: Is a bank required to continue its procedures to collect beneficial owner information from its legal entity customers after January 1, 2024, when reporting companies begin to report beneficial ownership information (BOI) directly to FinCEN?
A: Yes. Currently there are separate rules under law,
- (a) FinCEN’s Beneficial Ownership Information Reporting Rule for reporting companies and
- (b) FinCEN’s Customer Due Diligence Rule and Beneficial Ownership for Legal Entity Customer Rule which are applicable to banks.
Despite reporting companies filing BOI with FinCEN, banks must still identify and verify the identity of any individual who owns 25% or more of a legal entity, and an individual who controls the legal entity. Banks are also required to continue their risk assessment and ongoing oversight efforts under their customer due diligence policy and procedures. FinCEN has the authority to combine the BOI rules in the future which WBA expects will occur within the next several years.
Q: Is the information reported by a reporting company the same as what a bank collects under its beneficial owner rule?
A: No, the rules are not identical.
Q: Is a bank required to question its business customer whether it has reported BOI to FinCEN? Or is a bank required to somehow verify that BOI was reported to FinCEN?
A: No. A bank is not required to question or confirm a reporting company’s BOI filing with FinCEN. The reporting responsibility is solely with the reporting company.
Q: Is a bank required to first ensure a business customer has reported BOI to FinCEN before establishing a deposit account or loan with the business?
A: No , a bank is not required to first ensure a business customer has reported BOI to FinCEN before the bank can establish an account or loan with the business.
Q: Are all entities required to file with FinCEN?
A: No. There are twenty-three specific types of entities that are exempt from the reporting requirements of the rule. The Small Entity Compliance Guide contains a section (Is my company exempt from reporting requirements?) to help customers determine if they are exempt.
BOI Small Compliance Guide v1.1 (fincen.gov)
Q: Where should business customers be referred to for more information about the BOI reporting rule?
A: FinCEN has a dedicated webpage for its Beneficial Ownership Information Reporting Rule. The website includes a compliance guide, checklists, and informational videos about the rule. The website is also where reporting companies will file their required data starting in January 2024: Beneficial Ownership Information Reporting | FinCEN.gov
ALERT
FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled "Important Compliance Notice" and asks the recipient to click on a URL or to scan a QR code. Those emails or letters are fraudulent. FinCEN does not send unsolicited requests. Do not respond to these fraudulent messages, or click on links or scan QR codes within them.