1 31 U.S.C. § 5336 (West 2023). 2 FinCEN has not specified all types of entities that might be considered reporting companies, but it expects that the term will be interpreted broadly and include limited liability partnerships, statutory business trusts and most limited partnerships, as formation of those entities generally requires a filing with a secretary of state. However, entities such as sole proprietorships and certain partnership and trusts may not fall within this category. 3 31 U.S.C. § 5336(b)(1)(A). 4 31 C.F.R. § 1010.380(c)(2) (West 2023). Note that, as currently written, the CTA provides limited relief for tax-exempt entities, with exemptions specifically applying only to (i) nonprofit organizations described in Section 501(c) of the Internal Revenue Code (IRC) and exempt under IRC Section 501(a), (ii) taxexempt political organizations described in IRC Section 527(e)(1) and exempt under IRC Section 527(a), and (iii) charitable and split-interest trusts described in IRC Section 4947(a). Id. 5 31 C.F.R. § 1010.380(b). 6 31 C.F.R. § 1010.380(d). Frequently Asked Questions, Fin. Crimes Enforcement Network (Sept. 29, 2023), Questions D.2 & D.4, https://www.fincen. gov/boi-faqs. 7 31 C.F.R. § 1010.380(e). No reporting company will have more than two company applicants. Frequently Asked Questions, supra note 6, Question E.1. 8 31 C.F.R. § 1010.380(b). 9 The reporting company’s address must reflect either its main business location in the U.S, if applicable, or its primary U.S business site. Using a P.O. box or addresses of corporate agents or third parties is prohibited. 10 31 C.F.R. § 1010.380(b). 11 Agency Information Collection Activities; Proposed Collection; Comment Request; Beneficial Ownership Information Reports, 88 Fed. Reg. 2,760 (Mar. 20, 2023); Frequently Asked Questions, supra note 6, Question B.5. The comment period for the proposed action has closed. 12 31 C.F.R. § 1010.380(a)(1). 13 Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024, 88 Fed. Reg. 66,730 (Sept. 28, 2023). The comment period for the proposed action closes on October 30, 2023. One day later, on September 29, 2023, FinCEN published two 30-day notices seeking comment (1) on the mechanism that FinCEN intends to use to collect beneficial ownership information from reporting companies and (2) on the application that FinCEN intends to require individuals to use to obtain a FinCEN identifier (which identifier is voluntary). Agency Information Collection Activities; Submission for OMB Review; Comment Request; Beneficial Ownership Information Reports, 88 Fed. Reg. 67,443 (Sept. 29, 2023); Agency Information Collection Activities; Submission for OMB Review; Comment Request; Individual FinCEN Identifier Application, 88 Fed. Reg. 67,449 (Sept. 29, 2023). The comment period for these notices closes on October 30, 2023. 14 Id. at 66,731. 15 31 C.F.R. § 1010.380(a)(2). 16 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59,498, 59,524 (Sept. 30, 2022). No updated report is required for termination or dissolution of a reporting company. Id. at 59,514. 17 31 C.F.R. § 1010.380(a)(3). 18 Frequently Asked Questions, supra note 6, Question B.1. 19 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. at 59,508–09. 20 31 U.S.C. § 5336(c)(2)(B), (c)(5). 21 Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 Fed. Reg. 77,404 (Dec. 16, 2022). 22 31 U.S.C. § 5336(h); 31 C.F.R. § 1010.380(g). 23 31 U.S.C. § 5336(h)(C)(i); 31 C.F.R. § 1010.380(a)(3). Endnotes successfully navigate these rapidly developing rules and avoid any penalties for non-reporting. Through diligent observance of the CTA requirements, they can bolster legal protections and the financial integrity of their business clients. Furthermore, by partnering with their clients in compliance, advisors contribute to reinforcing financial transparency and security across the U.S. business ecosystem. Tristin S. Taylor is an associate at Baird Holm LLP. Taylor’s practice focuses on corporate transactions and general corporate matters. He counsels businesses of all sizes on a variety of matters, including entity formation, corporate governance, strategic transactions, and regulatory compliance. Adam M. Ripp is also an associate at Baird Holm LLP, representing businesses of all sizes on a variety of corporate transactions and general corporate matters. His practice focuses on strategic merger, acquisition, and divestiture transactions, as well as regulatory compliance, particularly in the banking sector and regarding antitrust matters. Ripp also regularly advises clients in a variety of industries through the entity formation process, corporate reorganization and succession matters, contract negotiations and disputes, and corporate governance issues. For more information, contact Taylor at ttaylor@bairdholm.com or Ripp at aripp@bairdholm.com. IPE 1031 | 888.226.0400 | WWW.IPE1031.COM | INFO@IPE1031.COM EXPERTISE From a Respected Industry Leader THE PREMIER SPECIALIST FOR SECTION 1031 EXCHANGES SECTION 1031 EXCHANGE 15 www.nescpa.org
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