A. General Information
If merchant's company is registered in the United States, you shall comply with the laws and regulations that apply to your company.
Under the U.S. Department of the Treasury's Beneficial Ownership Information Reporting (BOI) requirements and the Corporate Transparency Act, all companies registered in the United States are required to comply.
As a company registered in the United States, you are responsible for reviewing and accurately reporting beneficial ownership information to the US Treasury Department. This implies that companies shall understand and record the identity and detailed information of any individual or entity that has a substantial interest in your company. These beneficial owners could be shareholders, partners, directors, officers, or other individuals or entities with an interest in the company.
It should be made clear that this content does not constitute and is not intended to constitute legal advice. Regarding that laws may vary from region to region, It is recommended that companies shall consult with legal counsel to determine the specific impact that the laws of your jurisdiction may have on your business. Legal counsel can provide expert legal advice and guidance to ensure that your business is compliant.
To help all US-registered companies understand these compliance reporting requirements, a help document is provided below to answer some frequently-asked questions and help you better understand the details of the BOI regulations. This document provides certain information on reporting requirements, definitions of beneficial owners, information collection and reporting procedures to help you ensure compliant operations.
Please note that it is important to ensure that your company complies with applicable laws and regulations. Compliance with BOI regulations and the Corporate Transparency Act will help protect your company's reputation and avoid potential legal consequences.
B. Frequently Asked Questions
What is Beneficial Ownership Information?
Beneficial Ownership Information is the identity of individuals who directly or indirectly own or control a company.
Why are companies required to report Beneficial Ownership Information to the US Treasury?
In January 2021, the U.S. Congress passed the Corporate Transparency Act in a bipartisan effort. This legislation aims to prevent wrongdoers from hiding or profiting from illicit gains through shell companies or other opaque ownership structures by requiring the reporting of beneficial ownership information.
Who has access to beneficial ownership information under the Corporate Transparency Act?
Under FinCEN regulations, federal, state, local and tribal officials, as well as certain foreign officials making requests through U.S. federal agencies, are granted access to beneficial ownership information that is relevant to national security, intelligence and law enforcement activities. In certain scenarios, financial institutions may also access this information, provided they have the consent of te reporting entity. Regulators of financial institutions may also access Beneficial Ownership Information for supervisory purposes.
FinCEN is in the process of formulating regulations to govern access to and management of Beneficial Ownership Information. The information reported to FinCEN is stored in a secure, non-public database that is protected by rigorous information security procedures and controls commonly used by the federal government to protect sensitive information systems. FinCEN works closely with those authorised to access Beneficial Ownership Information to ensure that they understand their roles and responsibilities, and to ensure that reported information is used only for authorised purposes and is handled in a manner that ensures its confidentiality and integrity.
C. Reporting Process
Are companies with US entities currently required to report beneficial ownership information?
No, they are not currently required to do so. No one will be required to report Beneficial Ownership Information to FinCEN before 1 January 2024. FinCEN does not currently accept reports of beneficial ownership information.
When is it necessary to report a company's Beneficial Ownership Information to FinCEN?
For reporting entities incorporated or registered before 1 January 2024, the first report of Beneficial Ownership Information must be submitted by 1 January 2025.
For reporting companies incorporated or registered between 1 January 2024 and 1 January 2025, the initial Beneficial Ownership Information report must be submitted within 90 calendar days of receiving notice of the company's incorporation or registration.
The above is an overview and response to common questions about the BOI regulations. For further details on the BOI regulations, businesses are advised to visit the official FinCEN website at https://www.fincen.gov/boi and consult the relevant regulations.
Please note that this file is for reference only and does not constitute legal advice. If companies have any questions about BOI regulations or require legal advice, they should seek the advice of legal professionals.
D. Clarification of Applicable Reporting Obligations
| Companies Incorporated Before 2024 | Companies Incorporated After 2024 | |
| Effective Date | January 1, 2024 | |
| Reporting Conditions | Under states or Indian tribal law, domestic corporations and US limited liability companies (LLCs) formed by filing documents with the Secretary of State or similar office. | |
|
Categories of Individuals Required to Report |
1.Beneficial Owner |
1.Company Applicant 2.Beneficial Owner |
|
Definition of Required Reporting Personnel |
Beneficial owner 1. Individuals with at least 25% beneficial ownership. 2. Senior management (such as C-level executives). 3. Individuals with the power to appoint or discharge senior management. 4. Individuals who have policy-making, decision-making or significant influence over major decisions (such as business, financial or structural decisions). |
1. Company Applicant: a. Direct Submitter: An individual who submits documents directly to the relevant agency, either physically or electronically. b. Individual directing or controlling the submission: This person is considered to be the company submitter, even if they do not physically submit the documents to the relevant authority. 2. Beneficial owner a. Individuals with at least 25% beneficial ownership. b. Senior management (such as C-level executives). c. Individuals with the power to appoint or discharge senior management. d. Individuals who have policy-making, decision-making or significant influence over major decisions (such as business, financial or structural decisions). |
| Number of Reporters | All Beneficial Owners |
1. All Beneficial Owners 2.Either one company applicant or a maximum of two company applicants |
| Report Contents |
1. Company Information: a. Full legal name b. Trade name c. Complete current U.S. address d. State, province or foreign jurisdiction of incorporation e. For a foreign reporting company only, state or tribal jurisdiction of first registration f. IRS Taxpayer Identification Number (TIN). 2. Each beneficial owner: a. Full legal name b. Date of birth c. Complete current U.S. address d. Non-expired identification document (with unique identification number, issuing jurisdiction and photograph) |
1. Company Information: a. Full legal name b. Trade name c. Complete current U.S. address d. State, province or foreign jurisdiction of incorporation e. For a foreign reporting company only, state or tribal jurisdiction of first registration f. IRS Taxpayer Identification Number (TIN). 2. Information for each beneficial owner and each company applicant: a. Full legal name b. Date of birth c. Complete current U.S. address d. Non-expired identification document (with unique identification number, issuing jurisdiction and photograph) |
| Reporting Time | Before 1 January 2025 | Within 90 calendar days of registration |
| Penalties | The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. | |
| Notes (Regarding Specific Details) | FinCEN will issue instructions on how to complete the BOI reporting form before 1 January 2024, which will be available for review：www.fincen.gov/boi | |
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