Oklahoma business owners prep for transparency rule
Update 1.11.24 – AG Gentner Drummond announced today Wednesday, the Financial Crimes Enforcement Network (FinCEN) has granted state, local and tribal entities appropriate access to corporate ownership information following a national effort led by Attorney General Gentner Drummond.
Drummond and 41 other attorneys general asked the U.S. Department of Treasury bureau last February to adjust its proposed requirements for a national database established in the Corporate Transparency Act. The proposed requirements included burdensome regulations for non-federal entities to access information. Drummond said information in the database will be critical to fighting crime and terrorism.
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“I am pleased FinCEN’s Final Rule takes into account the concerns expressed by law enforcement representatives and streamlines access to the database for state, local and tribal enforcers,” Drummond said. “We can now use the database as Congress intended to efficiently access important corporate ownership data to protect the public.”
He said the database will help investigators hold accountable bad actors, from corrupt officials to organized criminals.
The Corporate Transparency Act, passed in 2021, requires certain companies to disclose their actual, or “beneficial,” owners to FinCEN. That information is then included in the national database, which began functioning Jan. 1.
ORIGINAL STORY
OKLAHOMA CITY (KFOR) – Oklahoma business owners should take heed to the new requirements of the Corporate Transparency Act (the “CTA”), which went into effect January 1, 2024.
Oklahoma business owners, are now required in the United States to disclose information regarding its beneficial owners, i.e., the individuals who ultimately own or control a company, to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).
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Oklahoma reporting companies include both domestic and foreign entities. Domestic reporting companies include corporations, LLCs, or any other similar entities that are created by the filing of a document with a secretary of state or any similar office under the law of a state.
Foreign reporting companies include privately formed entities and any other similar entities formed under the law of a foreign country that are registered to do business in the United States.
A beneficial owner of a reporting company according to CTA, is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise exercises substantial control over the entity; or owns or controls at least 25% of the equity interests of the entity.
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According to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), existing reporting companies that were formed before January 1, 2024, must file their initial reports no later than January 1, 2025. Newly-formed reporting companies created after January 1, 2024, must file their initial reports 90 days after receiving notice of their creation or registration.
If a company is required to report its beneficial ownership information to FinCEN, the company can do so free of charge, electronically through a secure filing system available via FinCEN’s website https://boiefiling.fincen.gov/.
Penalties for violating the CTA can include, $500.00 for each day that the violation continues. Violators are also subject to criminal penalties of imprisonment of up to two years and fines of up to $10,000 dollars.
Oklahoma business owners are encouraged to begin now and determine whether they meet the definition of a reporting company and compliance with the CTA. Oklahoma business owners can stay informed by subscribing to FinCEN Updates.
The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.
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