Background
As promised, in order to reduce the burdens on placed on legitimate businesses, while still working to detect, prevent, and prosecute financial crimes, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule, suspending reporting requirements for all domestic reporting companies under the Corporate Transparency Act (CTA). The interim final rule will take effect upon publication in the Federal Register (which should occur shortly), with a comment period open for 60-days after publication.
The interim final rule exempts all U.S. domestic reporting companies and their beneficial owners from the requirement to file beneficial ownership information (BOI) reports, or to update, or correct previously filed BOI reports, by excluding domestic companies from the scope of the term “reporting company”.
Regarding foreign reporting companies (i.e., entities formed under the law of a foreign country doing business in the U.S.), the interim final rule also exempts such companies and their U.S. person beneficial owners, from the requirement to provide the BOI of any U.S. persons who are beneficial owners of the foreign reporting company. Foreign reporting companies and their beneficial owners (who are not U.S. persons) remain subject to the BOI reporting requirements, albeit with an extended reporting deadline of 30-days from publication of the interim final rule, or if registered to do business in the U.S. on or after the date of publication, within 30-days after receiving notice that their registration is effective.
At this point, it is not clear whether FinCEN will make any changes to the interim final rule after the comment period ends.
Visit FinCEN.gov/boi for the latest updates on Beneficial Ownership Information reporting.
For more information on this topic, please read our prior Client Alert here.
DISCLAIMER: This Client Alert is for informational purposes only. Any legal advice regarding reporting obligations or application of the CTA to any client will require a new engagement with DRM. If your company is an existing client of the firm and has questions about the application of the CTA, please note that the firm’s current engagement does not include legal advice regarding your company’s reporting obligations or compliance with the CTA.
