Corporate Transparency Act – Frequently Asked Questions
These Frequently Asked Questions are explanatory only and do not supplement or modify any obligations imposed by statute or regulation. Please refer to K&R Strategic Partners website and previous CTA Blog posts for more information. K&R Strategic Partners recognized early on the immediate impact and importance of CTA compliance for our clients. We have worked tirelessly to create a process that is both transparent and meets the CTA’s requirements for proper compliance in a timely manner. Through our ongoing education and guidance, K&R is confident we are best suited to assisting you and your companies in the compliance process now and in the future under the Corporate Transparency Act.
1. What is the CTA (Corporate Transparency Act)?
The Corporate Transparency Act (CTA) is intended to provide law enforcement with beneficial ownership information for the purpose of detecting, preventing, and punishing terrorism, money laundering and other misconduct through business entities. This report will require information about the Business Entity, information for each of the Beneficial Owners of the company (any individual who has substantial direct or indirect control of the reporting company or who owns at least 25% of the ownership interests) as well as Company Applicants (the person or people filing on behalf of the entity).
2.Who is FinCEN?
FinCEN is a bureau of the U.S. Department of the Treasury. The Director of FinCEN is appointed by the Secretary of the Treasury and reports to the Treasury Under Secretary for Terrorism and Financial Intelligence. FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
FinCEN carries out its mission by receiving and maintaining financial transactions data; analyzing and disseminating that data for law enforcement purposes; and building global cooperation with counterpart organizations in other countries and with international bodies.
3. What is beneficial ownership information?
Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own (percentage) or control (title) a company.
4. Why do companies have to report beneficial ownership information to the U.S Department of the Treasury?
In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
5. Who is a beneficial owner of a reporting company?
A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests.
6. What is K&R’s process in assisting in CTA compliance for my business(s)?
K&R interviews all potential reporting companies and Beneficial Owners to determine if they meet the threshold per CTA of a reporting company and of a BO/controlling interest member.
Once identified K&R will collect and review information about beneficial owners and reporting companies for completion and accuracy.
K&R will obtain and file all necessary documents and reports per CTA compliance to meet mandatory deadlines set forth by the CTA.
7. Does K&R Strategic Partners charge a fee for CTA compliance reporting?
Yes, filing timely and proper BIO report to FinCEN could take as little as 90 minutes for a simple structure BOI report and 650 minutes for a complex structure BOI report filing. To obtain all necessary information and documents from clients and then working with FinCEN for proper filing K&R Strategic Partners fees can range from $450.00 to $2,000. K&R average fees will be between $450.00 and $750.00.
8. Does the Federal Government require that every Beneficial Owner or Substantial Control member have a FinCEN Identifier?
No, the federal government does not require a FinCEN Identifier. However, K&R does require that every Beneficial Owner or Substantial Control member has one to simplify the current process as well as any future changes that will need to be made with entities or the beneficial members themselves.
9. Does K&R Strategic Partners have anyone in house to assist with additional questions or to help me get started with K&R and my CTA compliance requirement?
Yes, we have a team ready for any additional questions. If you would like to employ K&R Strategic Partners in helping you with your CTA compliance requirement, please email Lee Jackson at [email protected].
