LIEB BLOG

Legal Analysts

Showing posts with label reporting requirements. Show all posts
Showing posts with label reporting requirements. Show all posts

Friday, March 28, 2025

Corporate Beneficial Ownership Reporting Changes: Who’s In, Who’s Out, and What You Need to Know

If you’re running a business or involved in corporate compliance, you’ve likely been keeping an eye on the Corporate Transparency Act ("CTA") and its requirements for reporting beneficial ownership information ("BOI"). Well, here’s some news you might welcome: the Financial Crimes Enforcement Network ("FinCEN") has made a change that affects when and how companies need to comply.


The big change is that domestic reporting companies and their beneficial owners are now exempt from filing initial, updated, or corrected BOI reports. This means that these companies no longer have to comply with the CTA’s reporting requirements. Domestic companies, whether corporations, LLCs, or other entities formed by filing with a state or tribal office, are no longer considered "reporting companies" under the Reporting Rule.


For foreign reporting companies, the new rule brings a couple of important exemptions:

  • Foreign companies are not required to report the BOI of U.S. persons who are beneficial owners.
  • Similarly, U.S. persons are not required to provide their BOI to foreign reporting companies.


In other words, foreign companies with only U.S. person beneficial owners are entirely exempt from BOI reporting. If a foreign company has individuals with substantial control who are non-U.S. persons, those non-U.S. persons must be reported, but U.S. persons with substantial control do not need to be included.


For foreign reporting companies, the filing deadline has been extended. They now have until 30 days after the publication of this rule, which was March 26, 2025, extending the deadline to April 25, 2025, or 30 days after their registration to do business in the U.S., whichever comes later, to submit their BOI reports.


Exemption Summary: 

  • Domestic reporting companies and their beneficial owners: Exempt from all BOI reporting.
  • Foreign reporting companies: Not required to report BOI of U.S. persons.
  • Foreign companies with only U.S. person beneficial owners: Entirely exempt from BOI reporting.
  • Foreign pooled investment vehicles: Exempt from reporting BOI of U.S. persons with substantial control.

FinCEN is also inviting comments from the public and plans to issue a final rule later this year. If you’d like to read the full rule or submit comments on the rule, click here. 

What do you think about this temporary exemption? Let us know in the comments!




Friday, February 16, 2024

New Rule for Real Estate Closings Coming Nationwide

On February 16, 2024, the Financial Crimes Enforcement Network (FinCEN) proposed a new rule to mandate certain individuals involved in real estate closings and settlements to report and maintain records on non-financed transfers of residential real property to specific legal entities and trusts nationwide. This proposed rule is called the Anti-Money Laundering Regulations for Residential Real Estate Transfers


Reporting persons ("RP") include, but are not limited, to real estate agents, title insurance companies, settlement agents, and attorneys. There is a “cascading” approach, based on the function performed by the person in the real estate closing and settlement that determines which RP has the burden to report. Regardless, real estate professionals would also have the option to designate a reporting person from among those in the cascade by agreement.


RPs are required to report:

  1. The names and addresses of reporting persons, transferee entities, transferee trusts, signing individuals, transferors, and any beneficial owners.
  2. The citizenship details for all beneficial owners of transferee entities or transferee trusts.
  3. The unique identifiers, such as IRS Taxpayer Identification Numbers (TINs), for individuals and entities involved in the transactions.
  4. A description of the capacity in which the signing individual is authorized to act, such as legal representative or employee.
  5. The details about the total consideration paid for the property, method of payment, accounts used, and the names of payors if different from the transferee entity or trust.
  6. The address of the property and a legal description, such as section, lot, and block.


RPs must e-file the report with FinCEN within 30 calendar days after the transferee entity or transferee trust receives the ownership interest in the residential real property. RPs must maintain a copy of the report, any certifications regarding beneficial ownership, and any designation agreements for five years from the date of the report filing.


Note that transfers of real property to individuals, as opposed to an entity (LLC, Corp, LLP) are not covered by this proposed rule. 


If this rule is adopted the effective date will be one year from the date the final rule is issued. This time period is to allow real estate professionals to have sufficient time to review and prepare for the implementation of the reporting requirements. 


Written comments about this proposed rule are being accepted and must be submitted on or before April 16, 2024 by utilizing this link.