Notice to business clients of an important change to the Corporate Transparency Act (CTA) of 2021 regarding beneficial ownership information.
Beginning January 1, 2024, many companies in the United States will be required to report information about individuals who ultimately own or control their company. These individuals are referred to as “beneficial owners”. FinCEN has provided detailed guidance regarding this new reporting requirement on their website https://www.fincen.gov/boi . Included on the website are resource guides, reference materials, videos, the ability to chat with FinCEN personnel, as well as instructions to prepare for and to file your company’s beneficial ownership information. Summit Bank encourages all business clients to visit the FinCEN website to learn more.
To summarize, we are providing some key points regarding reporting of your company’s beneficial ownership information.
1. Beneficial ownership information must be reported to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) in the timelines described below:
· A company that was formed prior to January 1, 2024 is required to report beneficial ownership information to FinCEN prior to January 1, 2025.
· A company that is formed during the calendar year 2024 (January 1st through December 31st) is required to report beneficial ownership information to FinCEN within 90 calendar days of receiving actual or public notice that your company’s creation or registration is effective.
· A company that is formed January 1, 2025 or later is required to report beneficial ownership information to FinCEN within 30 calendar days of receiving actual or public notice that your company’s creation or registration is effective.
2. There are two (2) types of reporting companies:
· Domestic reporting companies – corporations, limited liability companies and any other entity created by the filing of a document with a secretary of state or similar office in the United States.
· Foreign reporting companies – entities including corporations and limited liability companies formed under the law of a foreign country that have registered to business in the United States by the filing of a document with a secretary of state or similar office
3. There are 23 types of entities that are exempt from the reporting requirement. Please refer to the FinCEN website to learn more about reporting companies and those qualifying as exempt from reporting.
Please note Summit Bank is required to continue to ask for beneficial ownership information when opening deposit and loan accounts until such time as the Corporate Transparency Act of 2021 finalizes and Federal agencies subsequently grant access to financial institutions to the Beneficial Ownership Technology System.