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Treasury Issues Rules on Identifiers in Ownership Disclosures

Article
Treasury Dept’s final rule has circumstances when reporting companies can use an entity’s FinCEN identifier to fulfill their BOI reporting obligations under the CTA.
2 minute read
November 21, 2023

As incredible as it may seem, 2024 is approaching at the speed of a bullet train. With the speedy arrival of 2024, so too begins the Corporate Transparency Act (CTA) beneficial ownership information (BOI) filing requirements, which are effective January 1, 2024.

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule establishing the specific circumstances in which reporting companies can use an entity’s FinCEN identifier to fulfill their BOI reporting obligations. FinCEN identifiers are unique identifying numbers that FinCEN issues to individuals who have provided FinCEN with their BOI and to reporting companies that have filed initial BOI reports with FinCEN.

Previously, FinCEN finalized the use of individual FinCEN identifiers but not the use of entity FinCEN identifiers.

This final rule affects reporting companies that choose to report the entity FinCEN identifier of another reporting company in their BOI report. It also affects whether reporting companies decide to request an entity FinCEN identifier.

The final rule established the process through which a company may report another reporting company’s entity FinCEN identifier and full legal name in lieu of the required information to fulfill their BOI reporting obligations.

Specifically, a reporting company may list another entity’s FinCEN identifier and full legal name in lieu of that entity’s BOI only if: (1) the other entity has obtained a FinCEN identifier and provided that FinCEN identifier to the reporting company; (2) an individual is or may be a beneficial owner of the reporting company by virtue of an interest in the reporting company that the individual holds through an ownership interest in the other entity; and (3) the beneficial owners of the other entity and of the reporting company are the same individuals.

In addition to FinCEN issuing the final rule on using an entity’s FinCEN identifiers, staff also announced that the agency intends to launch a hotline and a chatbot to answer questions that “speak to the broadest possible universe of concerns” with respect to the CTA beneficial ownership filing requirements.

Stay tuned to Weaver for your updates on the CTA BOI filing requirements as the effective date nears. Join us for our December presentation of Owners Uncovered: FinCEN Wants You! on the CTA BOI Filing Requirements. Contact us for additional information.

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