On 8 December 2021, Treasury issued Notice of Proposed Rulemaking to allow the public to review and comment on proposed regulations (“Proposed Regulations“) to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). Passed on 1 January 2021, the CTA imposes on so-called “Reporting Companies” the obligation to report to Financial Crimes Enforcement Network (FinCEN) information regarding their “Beneficial Owners” and company “Applicants.” This Client Alert reviews the Proposed Regulations and is a companion to our January 2021 Client Alert that provided an overview of the CTA shortly after it was enacted and which can be found here: Client Alert – Updates on Beneficial Ownership Reporting in the United States.
The CTA itself does not sufficiently define various terms essential for its implementation. The Proposed Regulations are intended to provide clarification and guidance on the reporting obligations mandated by the CTA. The Proposed Regulations are essential for another reason as well, since the CTA provides that its beneficial ownership reporting requirements take effect”… on the effective date of the regulations prescribed by the Secretary of the Treasury.”
Below we summarize the Proposed Regulations and draw special attention to FinCEN’s clarification of issues of concern for high net worth individuals.
Click here to download the full alert.