In order to assist law enforcement and national security by preventing owners from hiding behind shell and front companies, the new Corporate Transparency Act will require companies to report beneficial owners (direct and indirect) who own at least 25% and those persons who exercise substantial control. Substantial control will include all senior officers or persons with similar functions regardless of title.
The initial report to FinCEN must include the company name and any fictitious business names, a business street address, state of formation, taxpayer identification number, beneficial owners (full names, date of birth, residential address, non-expired identification with number and photo), and company applicants (including whoever signed or directed the signing of the Articles).
Reports are due 14 calendar days after formation of a new company as well as 30 calendar days after any change. There are both civil and criminal penalties for failure to file.
For more details, pending final regulations, see this article written by one of our attorneys Jason Murai.
