Notice of Beneficial Ownership Information Reporting Requirements
- The Corporate Transparency Act (“CTA”)1 will require certain U.S. legal entities as well as foreign entities registered to do business in the U.S. to report information about the entity itself, its beneficial owners, and the applicant who formed it.
- The reporting requirements of the CTA will begin January 1, 2024. If your entity was created before January 1, 2024, you will have until January 1, 2025 to report the required information on the FinCEN registry.
- FinCEN recently published a Small Entity Compliance Guide that is helpful in understanding who must report information as a beneficial owner.
On January 1, 2021, Congress passed the National Defense Authorization Act (“NDAA”) which included the Corporate Transparency Act (“CTA”). Through the CTA, the US Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) was tasked with establishing a registry of beneficial owners for entities defined as “reporting companies.”
On September 29, 2022, FinCEN issued its final rule (the “Rule”) implementing the CTA’s beneficial ownership reporting provisions. The goal of the CTA and the Rule is to help prevent bad actors from forming entities in the U.S. for the purposes of money laundering, terrorist financing, corruption, tax fraud, drug and sex trafficking, and other illicit activities. In principle, this sounds like a goal we should all support. In practice, it will mean more work for the many of us who have or participate in any kind of entity that is created by filing a document with a state secretary of state’s office.
A few definitions first:
“Reporting companies” include limited partnerships, limited liability companies, corporations, or any other type of entity that is created by filing a document with the Secretary of State. This includes foreign companies doing business in the U.S. There are 23 entity types that are exempt from reporting under the CTA. Generally, companies that are already subject to reporting requirements are exempt. This would include public companies registered with the Securities and Exchange Commission, public utilities, investment companies and advisors, banks, insurance companies, state licensed insurance producers, and tax-exempt entities, among others. Also exempt from meeting the requirements of the CTA are “large operating companies” and “inactive entities.” For a full list of exempt entities, see 31 C.F.R. § 1010.380(c)(2).
“Beneficial owners” means any individual who, directly or indirectly, either: (i) exercises substantial control over a reporting company; or (ii) owns or controls at least 25 percent of the ownership interests of a reporting company.
“Substantial control” includes any individual authorized to make important decisions on the entity’s behalf. This includes the board of directors, board of managers, officers, etc. For a trust who may be a member or owner of a reporting company, the CTA identifies the following as potential beneficial owners of the trust: (i) a trustee, or any other individual, with authority to dispose of the trust assets; (ii) a beneficiary who is the sole permissible recipient of income from the trust or who has the right to demand distribution or withdraw substantially all of the assets from the trust; and (iii) a grantor or settlor who has the right to revoke the trust or withdraw the assets from the trust.
Effective January 1, 2024, all “reporting companies” created prior to January 1, 2024 will have until January 1, 2025 to file their beneficial ownership information with the FinCEN registry.
The proposed rules published September 28, 2023 propose to change the time frame for reporting companies created between January 1, 2024 and December 31, 2024 to file their beneficial ownership information with the FinCEN registry from 30 days to 90 days from the date of filing with the Secretary of State. Reporting companies formed from and after January 1, 2025 would have 30 days to file the beneficial ownership information with FinCEN.
Reporting companies have 30 days to report changes to information previously filed and must correct inaccurate information within 30 days of becoming aware of the inaccuracy.
For companies created after January 1, 2024, in addition to the beneficial owners, the “applicant” will be required to submit its information to FinCEN. The “applicant” is the person that does the filing or who directs and/or controls the filing. The “applicant” may very well be the lawyer performing the filing.
A reporting company must register with FinCEN providing the following information:
- Full legal name;
- Trade name, if any;
- Business street address;
- State of formation;
- IRS Tax ID or Employer Identification Number.
For each of the reporting company’s beneficial owners (and the applicant, as applicable), the following information must be provided to FinCEN:2
- Full Legal Name;
- Date of Birth;
- Street Address (no P.O. Boxes);
- A unique identifying number from an unexpired passport, state driver’s license, or other identification issued by a state, local government, or Indian Tribe; and
- A copy of the document showing the unique identifying number.
FinCEN will be required to store the collected information in a secure database and the information will only be available by request from (i) a federal law enforcement agency; (ii) a state, local, or tribal law enforcement agency (with a court order); (iii) a federal agency on behalf of a foreign country (under an international agreement); (iv) financial institutions for customer due diligence purposes (with the consent of the reporting company).
If a company fails to comply with the reporting requirements of the CTA, such company will be subject to civil penalties of $500 for each day that a violation continues, fines of up to $10,000, and imprisonment for up to two years for willful or fraudulent violations. If a beneficial owner becomes aware of a mistake in the information provided to the reporting company and reported to FinCEN, the CTA contains a safe harbor allowing a reporting company to correct the beneficial ownership information within 14 calendar days after the date the reporting company becomes aware of the inaccuracy if the beneficial owner (i) was not trying to evade the reporting requirement; (ii) had no knowledge of the inaccuracy; and (iii) corrects the inaccuracy within 90 calendar days after the report is submitted.
At this time, we advise you to begin developing a full list of entities in which you either own an interest of 25% or more (individually, through a revocable trust, or through another LLC) or have substantial control by serving as a board member, manager, officer, or some contractual arrangement. You should also begin assembling a list of all beneficial owners of each entity and contact each such beneficial owner to begin gathering the information required to be provided to FinCEN. This could include requesting a copy of a valid driver’s license, passport or state identification. If any such documentation expires before January 1, 2024, it will need to be renewed before reporting to FinCEN. Additionally, since the information required to be reported may constitute personal information protected by various and ever-changing state and federal privacy laws, you should consider, at a minimum: (i) obtaining and documenting consent from beneficial owners for using and processing their information; and (ii) implementing and maintaining reasonable technical, administrative, and physical security measures to protect information (especially the copies of the identifying documents) from unauthorized access.
FinCEN released a Small Business Compliance Guide and answers frequently asked questions at: https://www.fincen.gov/boi/small-business-resources.
You can find more information about the requirements of the CTA at https://www.fincen.gov/boi.
 “Corporate Transparency Act” or “CTA” means the law appearing at 31 U.S.C. § 5336 and the rules and regulations implementing the reporting provisions thereof at 31 C.F.R. § 1010.380.
 For those clients who are beneficial owners of many “reporting companies,” you will be able to obtain a FinCen Identifier to comply with the reporting requirements under the CTA.
FOR IMMEDIATE RELEASE: October 3, 2023
Oklahoma City, OK — In a strategic move aimed at providing greater value to clients, Rosell & Love, PLLC is delighted to announce Jeff M. Love’s move to named partner. Jeff joins Armando Rosell in leading the future growth of the company.
The integral change in the firm’s structure reflects its commitment to building strong client relationships and delivering high quality legal services in an efficient and cost-effective manner.
“We are thrilled Jeff has stepped up his role within the firm,” Rosell, who started the firm in 2017 said. “His extensive experience and commitment to client-centric legal solutions align perfectly with our values. I believe his presence will further strengthen our ability to deliver exceptional service for our clients.”
Jeff has been practicing law at Rosell & Love for four years and is equally excited about this new chapter. “I am honored to advance my role within the firm. This is a firm that has consistently demonstrated a deep commitment to excellence and a genuine passion for the practice of law. I am eager to contribute my skills and knowledge to build on the firm’s commitment to providing top-notch legal services.”
With this strategic change, Rosell & Love, PLLC reinforces its position as a leading law firm in Oklahoma City.
About Rosell & Law, PLLC
Rosell & Love, PLLC redefines legal excellence through a nontraditional, client-centric approach. The team comprises award-winning lawyers dedicated to guiding clients through legal challenges with unwavering commitment and integrity. Located in Oklahoma City, Rosell & Love serves local and national clients with high-quality, efficient and proactive counsel to achieve the best outcomes.
Jeff M. Love, Partner
Rosell & Love, PLLC
101 North Robinson Avenue
Corporate Tower, Suite 700
Oklahoma City, Oklahoma 73102
Commencement of a Lawsuit
- A lawsuit is commenced by filing the Petition and issuing Summons.
- The Summons and Petition are served on the defendant.
- The defendant has 20 days to file an Answer to the Petition or otherwise respond (filing a motion to dismiss for example).
- After the commencement of the case, the court will issue a Scheduling Order either on its own or by motion of a party.
- The Scheduling Order sets forth the deadlines for the parties to complete certain procedural milestones (for example, Deadlines to Add Parties or Claims, to Complete Discovery, or File Summary Judgment/Dispositive Motions).
- The Scheduling Order will set the date for a pre-trial conference and sometimes set a trial date.
- After the Answer is filed, the parties commence discovery. Some of the instruments used for discovery are as follows:
- Written Interrogatories – Responding party has 30 days to respond
- Request for Admissions – Responding party has 30 days to respond
- Request for Production of Documents – Responding party has 30 days to respond
- Subpoena Duces Tecums issued to Third-Parties seeking documents and/or testimony – Responding party has a minimum of 14 days to respond
Summary Judgment Proceedings
- After the discovery is completed, one or both parties typically file a motion for summary judgment seeking an adjudication of the claims by the judge without a trial. To win, a party must show that there is no dispute of a material fact necessary to prove an element of its claim or defense. To defeat summary judgment, a party must show that a dispute of a material fact exists necessitating a trial to decide the disputed facts.
- The pre-trial conference is a meeting that occurs between the presiding trial judge and counsel for the parties.
- The purpose of the conference is to discuss all remaining issues that need to be completed before the commencement of the trial.
- The trial judge will inquire if there are any objections to the evidence to be introduced at trial and if so will either hear the objections at the conference or set a hearing date to hear the objections. Often, the parties will file a motion in limine to state the objection to the introduction of certain evidence at trial and support the objection with argument and legal authorities.
- At the conclusion of the pre-trial conference, the judge will issue a pre-trial conference order setting forth the claims and defenses to be tried, the names of all witnesses to be called at trial along with a description of each witness’s scope of testimony, a list of all exhibits to be used at trial, the anticipated length of trial and the trial date.
- If the parties make it past the summary judgment stage without the trial judge entering a judgment on all claims, then the case moves to a trial on the merits of all remaining claims and defenses.
- Jury Trial – If the amount in controversy is less than $10,000, the case will be decided by a six (6) person jury. If the amount in controversy is $10,000 or more, the case will be decided by a twelve (12) person jury
- Judge Trial – If the parties waive a trial by jury, the trial judge will decide the case
Need a good attorney to walk you through this process? Contact Rosell & Love today.
Whether you are currently in a foreclosure action or if you need to commence a foreclosure action, Rosell & Love can help.
- Send notice of default to the borrower.
- Obtain title report and conduct a search of the uniform commercial code central filing system for parties holding a security interest.
- File/Issue Summons, Petition & Lis Pendens (and Applicaiton for a Receiver, if necessary).
- File Affidavit of Military Service.
- Record certified copy of Notice of Lis Pendens in the County Clerk’s Office.
- Obtain service of summons and petition on all parties.
- Obtain title update through date of Lis Pendens, and amend Petition if necessary.
- Move for Default or Summary Judgment .
- Obtain & file judgement.
- Mail Judgment to all parties.
- Have Special Execution issued by Court Clerk.
- Deliver Special Execution, Notice of Sale, Appraisement and Sheriff Return to County Sheriff.
- Sheriff conducts appraisal and sets date of Sheriff’s Sale.
- Sheriff publishes Notice of Sheriff’s Sale.
- Send Notice of Sheriff’s Sale to all persons with an interest in the property.
- File Affidavit attesting that notice of Sheriff’s Sale was properly given.
- Obtain bidding instructions from client.
- Attend Sheriff’s Sale (usually six weeks after Special Execution issued).
- Complete Sheriff’s Return of Sale.
- File Motion to Confirm Sale & obtain hearing date.
- Serve Motion to Confirm on all parties and publish if any party’s address is unknown.
- File Affidavit attesting that notice of hearing on Motion to Confirm was properly given.
- Obtain and file Order Confirming Sale.
- Mail Order Confirming Sale to all Parties.
- Obtain Sheriff’s signature on Sheriff’s Deed and record with County Clerk.
- Obtain title policy.
- File motion for attorney fees.
- Obtain and file Order Awarding Attorney fees.
- Move for Deficiency Judgment (must be done within ninety days after sale.)
- Obtain and file Journal Entry of Deficiency Judgment.
- Apply for Hearing on Assets.
- Obtain and serve Order directing Hearing on Assets.
- Conduct Hearing on Assets.
- Execute on Deficiency Judgment.
Need a good attorney to walk you through this process? Contact Rosell & Love today.
Types of Entities recognized by Oklahoma Statute
- Limited Liability Company
- Limited Liability Partnership
- Limited Partnership
- General Partnership
- Professional Limited Liability Company
- Professional Limited Liability Partnership
- Charitable Organization (non-profit corporation)
- Legal Entities are formed by filing certain documents with the Oklahoma Secretary of State
- A Corporation is formed by filing Articles of Incorporation
- A Limited Liability Company is formed by filing Articles of Organization
- A Partnership is formed by filing a Certificate of Limited Partnership or a Statement of Qualification for Limited Liability Partnerships
- Governing Documents
- A Corporation is governed by Bylaws and a Shareholder’s Agreement
- A Limited Liability Company is governed by an Operating Agreement
- A Partnership (general, limited or limited liability) is governed by a Partnership Agreement
- A Charitable Organization (non-profit corporation) is governed by its Bylaws with certain restriction placed upon it by the Federal Tax Code if the organization claims tax exemption
- Registered Service Agent
- Oklahoma statutes require an entity to register a service agent having an Oklahoma address with the Oklahoma Secretary of State. The service agent is the party designated and authorized to accept service of summons and petition or other legal process on its behalf. Rosell Love often serves as the registered service agent for our clients.
Need a good attorney to walk you through this process? Let us know if we can help. Contact Rosell & Love today.