On November 8, the Financial Crimes Enforcement Network (FinCEN) issued a final rule outlining the conditions under which a reporting company can report another entity’s FinCEN identifier instead of an individual’s beneficial ownership information (BOI). A FinCEN identifier is a unique number issued by FinCEN to an individual or a reporting company that has provided its BOI to FinCEN.

The final rule allows a reporting company to report another entity’s FinCEN identifier and full legal name in lieu of other required BOI if three conditions are met:

  1. The entity has obtained a FinCEN identifier and provided it to the reporting company.
  2. An individual is or may be a beneficial owner of the reporting company through an interest in the reporting company held through the entity.
  3. The beneficial owners of the entity and of the reporting company are the same individuals.

The rule aims to address concerns that the reporting of entity FinCEN identifiers could obscure the identities of beneficial owners, which would contradict the intended purpose of the Corporate Transparency Act (CTA).

However, the rule’s practical use may be limited due to the broad definition of beneficial ownership, which could make it rare for a reporting company and an intermediate entity to have the same beneficial owners.

If you have questions or concerns about how this development may impact your reporting practices or obligations, please reach out to your primary Troutman Pepper contact. To read the full article, click here.