CTA Update: Beneficial Ownership Information Reports
The Corporate Transparency Act (“CTA”) requires Reporting Companies created on or after January 1, 2024, to submit Beneficial Ownership Information reports to FinCEN within 90 days of formation or registration.
Any entity created or registered to do business in the U.S. (a “Reporting Company”) that does not qualify for an exemption under the CTA should begin analyzing who within the company is deemed a “Beneficial Owner.” A Reporting Company’s Beneficial Owners include all individuals who, directly or indirectly: (1) exercise substantial control over the Reporting Company, or (2) own or control 25% or more of the ownership interests of the Reporting Company.
“Substantial control” is based on the power an individual may exercise over the Reporting Company. This means that “Beneficial Owners” include individuals who hold senior officer positions (e.g., President, CFO, GC, CEO, COO, etc.), are important decision makers, have authority to appoint or remove certain officers, or have other forms of substantial control over the Reporting Company’s business, finances, or structure.
“Ownership interests” include, among others, equity, stock, voting rights, capital or profit interest, and any other instrument, contract, or other mechanism used to establish ownership.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
CTA Update: Beneficial Ownership Information Reports
The Corporate Transparency Act (“CTA”) requires Reporting Companies created on or after January 1, 2024, to submit Beneficial Ownership Information reports to FinCEN within 90 days of formation or registration.
Any entity created or registered to do business in the U.S. (a “Reporting Company”) that does not qualify for an exemption under the CTA should begin analyzing who within the company is deemed a “Beneficial Owner.” A Reporting Company’s Beneficial Owners include all individuals who, directly or indirectly: (1) exercise substantial control over the Reporting Company, or (2) own or control 25% or more of the ownership interests of the Reporting Company.
“Substantial control” is based on the power an individual may exercise over the Reporting Company. This means that “Beneficial Owners” include individuals who hold senior officer positions (e.g., President, CFO, GC, CEO, COO, etc.), are important decision makers, have authority to appoint or remove certain officers, or have other forms of substantial control over the Reporting Company’s business, finances, or structure.
“Ownership interests” include, among others, equity, stock, voting rights, capital or profit interest, and any other instrument, contract, or other mechanism used to establish ownership.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.