In the ever-evolving landscape of corporate regulations, the Corporate Transparency Act (CTA) has emerged as a pivotal player, requiring organizations to disclose intricate details about their beneficial ownership structure. Aimed at combating money laundering, tax evasion, and other financial crimes, this regulation poses essential questions for businesses. Let’s answer the question, “what is the Corporate Transparency Act doing with my info”.

What is going to happen to the reported information?

US Law enforcement officials emphasize that the lack of access to up-to-date and accurate beneficial ownership information (BOI) hampers their efforts to combat financial crimes in the United States. The comprehensive BOI database is envisioned as a tool to unveil potential connections between dubious actors and opaque businesses, including shell companies.

To help achieve this goal, certain government entities and officials will be granted access to the BOI data. However, stringent security and confidentiality protocols are imperative to safeguard the companies obligated to report their beneficial ownership structure to the Corporate Transparency Act.

According to the proposed regulations by FinCEN:

  • Only authorized individuals will access the BOI.
  • Authorized recipients may only use the BOI for purposes sanctioned by the law.
  • The CTA aims to strike a balance between BOI security and confidentiality while making it accessible for specific lawful purposes.

According to the proposed regulations, certain officials like federal, state, local, and tribal authorities, as well as specific foreign officials working through a federal agency, will have access to the BOI for activities related to national security, intelligence, and law enforcement.

Financial institutions with customer due diligence requirements and their regulators will also have access to the BOI to ensure compliance with those requirements.

Who will have access to the reported BOI?

The CTA designates three categories of individuals with direct access to the beneficial ownership IT system:

  • Federal agencies involved in national security, intelligence, and law enforcement.
  • Treasury officers and employees for official duties or tax administration.
  • State, local, and tribal law enforcement agencies.

These agencies require direct access for effective utilization of the beneficial ownership information. To prevent misuse, federal agencies engaged in national security, intelligence, or law enforcement activities must justify their searches, audited by FinCEN. State, local, and tribal law enforcement agencies need court-issued documents authorizing them to seek BOI from FinCEN.

Are there any safeguards in place to protect my data?

Proposed regulations outline robust safety measures, including strict cybersecurity controls, confidentiality protections, and restrictions for reported BOI. The CTA is diligently working on a secure, private, cloud-based database employing advanced security methods. This system, meeting the highest Federal Information Security Management Act (FISMA) level—FISMA High, is set to launch on January 1, 2024, coinciding with the new reporting rule.

Does my business need to report its beneficial ownership information?

Navigating the intricacies of the Corporate Transparency Act might seem daunting, but SixFifty is here to simplify the process. Our legal experts have crafted a free Corporate Transparency Act Worksheet, a user-friendly tool designed to assess whether your business needs to file a beneficial ownership report.

This tool will walk you through a series of questions about your business just like a lawyer would, then let you know whether you need to report your ownership structure.

By using this tool, you not only ensure compliance but also reduce potential risks of civil and criminal liability. The free Corporate Transparency Act Worksheet is available in the SixFifty Marketplace for your convenience.

In the dynamic realm of corporate transparency, staying informed and prepared is key. Trust SixFifty to provide the tools and resources necessary to navigate the complexities of the Corporate Transparency Act with confidence and ease.