Josh Twilley No Comments

FinCEN Adds New BOI FAQs

Last month, the Financial Crimes Enforcement Network (FinCEN) added 16 new questions to the Beneficial Ownership Information (BOI) FAQs

Here’s what’s new, by category, sourced from fincen.gov

Category C. Reporting Company

Q. Do the BOI reporting requirements apply to S-Corporations?

Yes. A corporation treated as a pass-through entity under Subchapter S of the Internal Revenue Code (an “S Corporation” or “S-Corp”) that qualifies as a reporting company—i.e., that is created or registered to do business by the filing of a document with a secretary of state or similar office, and does not qualify for any of the exemptions to the reporting requirements—must comply with the reporting requirements. The S-Corp’s pass-through structure for tax purposes does not affect its BOI reporting obligations. In particular, pass-through treatment under Subchapter S does not qualify an S-Corp as a “tax-exempt entity” under FinCEN BOI reporting regulations.

Q. If a domestic corporation or limited liability company is not created by the filing of a document with a secretary of state or similar office, is it a reporting company?

No. While FinCEN’s BOI reporting regulations define a domestic reporting company as including a corporation or limited liability company, the inclusion of those entities is based on an understanding that domestic corporations and LLCs are generally created by the filing of a document with a secretary of state or similar office. In an unusual circumstance where a domestic corporation or limited liability company is created, but not by the filing of a document with a secretary of state or similar office, such an entity is not a reporting company.  

Category D. Beneficial Owner

Q. Who is a beneficial owner of a reporting company?

A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of a reporting company’s ownership interests. Because beneficial owners must be individuals (i.e., natural persons), trusts, corporations, or other legal entities are not considered to be beneficial owners. However, in specific circumstances, information about an entity may be reported in lieu of information about a beneficial owner.

Q. Can beneficial owners own or control reporting companies through trusts?

Yes, beneficial owners can own or control a reporting company through trusts. They can do so by either exercising substantial control over a reporting company through a trust arrangement or by owning or controlling the ownership interests of a reporting company that are held in a trust. 

Q. Who are a reporting company’s beneficial owners when individuals own or control the company through a trust?

A beneficial owner is any individual who either: (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of a reporting company’s ownership interests. Exercising substantial control or owning or controlling ownership interests may be direct or indirect, including through any contract, arrangement, understanding, relationship, or otherwise.

Trust arrangements vary. Particular facts and circumstances determine whether specific trustees, beneficiaries, grantors, settlors, and other individuals with roles in a particular trust are beneficial owners of a reporting company whose ownership interests are held through that trust.

For instance, the trustee of a trust may be a beneficial owner of a reporting company either by exercising substantial control over the reporting company, or by owning or controlling at least 25 percent of the ownership interests in that company through a trust or similar arrangement. Certain beneficiaries and grantors or settlors may also own or control ownership interests in a reporting company through a trust. The following conditions indicate that an individual owns or controls ownership interests in a reporting company through a trust:

  • a trustee (or any other individual) has the authority to dispose of trust assets;
  • a beneficiary is the sole permissible recipient of income and principal from the trust, or has the right to demand a distribution of or withdraw substantially all of the assets from the trust; or
  • a grantor or settlor has the right to revoke the trust or otherwise withdraw the assets of the trust.

This may not be an exhaustive list of the conditions under which an individual owns or controls ownership interests in a reporting company through a trust. Because facts and circumstances vary, there may be other arrangements under which individuals associated with a trust may be beneficial owners of any reporting company in which that trust holds interests. 

Q. How does a reporting company report a corporate trustee as a beneficial owner?

For purposes of this question, “corporate trustee” means a legal entity rather than an individual exercising the powers of a trustee in a trust arrangement.

If a reporting company’s ownership interests are owned or controlled through a trust arrangement with a corporate trustee, the reporting company should determine whether any of the corporate trustee’s individual beneficial owners indirectly own or control at least 25 percent of the ownership interests of the reporting company through their ownership interests in the corporate trustee.

  • For example, if an individual owns 60 percent of the corporate trustee of a trust, and that trust holds 50 percent of a reporting company’s ownership interests, then the individual owns or controls 30 percent (60 percent × 50 percent = 30 percent) of the reporting company’s ownership interests and is therefore a beneficial owner of the reporting company.
  • By contrast, if the same trust only holds 30 percent of the reporting company’s ownership interests, the same individual corporate trustee owner only owns or controls 18 percent (60 percent × 30 percent = 18 percent) of the reporting company, and thus is not a beneficial owner of the reporting company by virtue of ownership or control of ownership interests.

The reporting company may, but is not required to, report the name of the corporate trustee in lieu of information about an individual beneficial owner only if all of the following three conditions are met:

  • the corporate trustee is an entity that is exempt from the reporting requirements;
  • the individual beneficial owner owns or controls at least 25 percent of ownership interests in the reporting company only by virtue of ownership interests in the corporate trustee; and
  • the individual beneficial owner does not exercise substantial control over the reporting company.

In addition to considering whether the beneficial owners of a corporate trustee own or control the ownership interests of a reporting company whose ownership interests are held in trust, it may be necessary to consider whether any owners of, or individuals employed or engaged by, the corporate trustee exercise substantial control over a reporting company. The factors for determining substantial control by an individual connected with a corporate trustee are the same as for any beneficial owner. 

Category F. Reporting Requirements

Q. What address should a reporting company report if it lacks a principal place of business in the United States?

If a reporting company does not have a principal place of business in the United States, then the company must report to FinCEN as its address the primary location in the United States where it conducts business.

If a reporting company has no principal place of business in the United States and conducts business at more than one location within the United States, then the reporting company may report as its primary location the address of any of those locations where the reporting company receives important correspondence.

If a reporting company has no principal place of business in the United States and does not conduct business functions at any location in the United States, then its primary location is the address in the United States of the person that the reporting company, under State or other applicable law, has designated to accept service of legal process on its behalf. In some jurisdictions, this person is referred to as the reporting company’s registered agent, or the address is referred to as the registered office. Such a reporting company should report this address to FinCEN as its address. 

Category G. Initial Report

Q. A company that was created or registered before January 1, 2024, and was exempt from the BOI reporting requirements loses its exempt status between January 1, 2024, and January 1, 2025. How long does the reporting company have to file its initial BOI report?

Normally, a company that loses its exempt status must file a BOI report with FinCEN within 30 calendar days after the date that it no longer meets the criteria for any exemption. A reporting company created or registered to do business before January 1, 2024, however, has until January 1, 2025, to file its initial BOI report.

FinCEN has determined that previously exempt entities that existed before 2024 and lose their exempt status in 2024 will receive the benefit of whichever of these two timeframes is longer: (1) the remaining days left in the one-year filing period for existing companies; or (2) the 30-calendar-day period for companies that lose their exempt status.

Thus, for example, if an existing reporting company ceases to be exempt on February 1, 2024, the company will have until January 1, 2025, to file its initial BOI report. If the company ceases to be exempt on December 15, 2024, the company will have until January 14, 2025, to file its initial BOI report. 

Category K. Compliance/Enforcement

Q. What penalties do individuals face for violating BOI reporting requirements?

As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591.

A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information. [Updated April 18, 2024]

Category L. Reporting Company Exemptions

Q. If the size of a reporting company fluctuates above and below one of the thresholds for the large operating company exemption, does the reporting company need to file a BOI report?

Yes. The company will need to file a BOI report if it otherwise meets the definition of a reporting company and does not meet the criteria for the large operating company exemption (or any other exemption). If the company files a BOI report and then becomes exempt as a large operating company, the company should file a “newly exempt entity” BOI report with FinCEN noting that the company is now exempt. If at a later date the company no longer meets the criteria for the large operating company exemption or any other exemption, the reporting company should file an updated BOI report with FinCEN. Updated reports should be submitted to FinCEN within 30 calendar days of the occurrence of the change.

To qualify for the large operating company exemption, an entity must have more than 20 full-time employees in the United States, must have filed a Federal income tax or information return in the United States in the previous year demonstrating more than $5,000,000 in gross receipts or sales, and must have an operating presence at a physical office in the United States. 

Category O. Access to Beneficial Ownership Information

Q. When will authorized recipients have access to beneficial ownership information?

FinCEN will take a phased approach to providing access to beneficial ownership information.

  • The first phase, expected to begin in the spring of 2024, will be a pilot program for a handful of Federal agency users.
  • The second phase, expected in the summer of 2024, will extend access to Treasury offices and other Federal agencies engaged in law enforcement and national security activities that already have memoranda of understanding for access to Bank Secrecy Act information.
  • The third phase, expected in the fall of 2024, will extend access to additional Federal agencies engaged in law enforcement, national security, and intelligence activities, as well as to State, local, and Tribal law enforcement partners.
  • The fourth phase, expected in the winter of 2024, will extend access to intermediary Federal agencies in connection with foreign government requests.
  • The fifth phase, expected in the spring of 2025, will extend access to financial institutions subject to customer due diligence requirements under applicable law and their supervisors.

FinCEN is not currently accepting requests for access to beneficial ownership information. FinCEN will provide further guidance on how to request access in the future. 

Q. I work at a Federal agency. How can I request beneficial ownership information from FinCEN?

FinCEN is authorized to disclose beneficial ownership information to Federal agencies engaged in national security, intelligence, or law enforcement activities as well as Federal regulatory agencies that supervise financial institutions for compliance with customer due diligence requirements. To request beneficial ownership information from FinCEN, such Federal agencies will first need to enter into a memorandum of understanding with FinCEN describing how the agency will protect the security and confidentiality of the information. Additional information about entering into such a memorandum will be available when your agency becomes eligible to obtain access to beneficial ownership information under the phased implementation timeline.

In the meantime, we encourage agencies interested in access to beneficial ownership information to review the Beneficial Ownership Information Access and Safeguards Rule and become familiar with this rule’s requirements for agencies accessing beneficial ownership information. 

Q. Which state agencies can request beneficial ownership information from FinCEN?

State, local, and Tribal law enforcement agencies—i.e., government agencies authorized by law to engage in the investigation or enforcement of civil or criminal violations of law—will be able to request beneficial ownership information from FinCEN in certain circumstances. A State, local, or Tribal law enforcement agency, however, can only request beneficial ownership information from FinCEN if authorized by a “court of competent jurisdiction” to seek the information in a criminal or civil investigation. The state, local, or Tribal law enforcement agency also must meet certain other access requirements, including entering into a memorandum of understanding with FinCEN that describes how the agency will protect the security and confidentiality of the information.

Additionally, state regulatory agencies that supervise financial institutions for compliance with customer due diligence requirements may also request beneficial ownership information from FinCEN to conduct such supervision. Like other domestic government agencies, to receive beneficial ownership information from FinCEN, state regulatory agencies must also enter into a memorandum of understanding with FinCEN that describes how the agency will protect the security and confidentiality of the information. 

Q. Can foreign governments access beneficial ownership information?

Foreign governments cannot directly access the beneficial ownership IT system—the secure system that FinCEN uses to receive and store BOI—but will be able to request beneficial ownership information through intermediary Federal agencies. Foreign governments may request beneficial ownership information for a law enforcement investigation or prosecution, or for a national security or intelligence activity, that is authorized under the laws of the foreign country. There are two different request channels available to foreign governments:

  • requests made under an international treaty, agreement, or convention; or
  • requests made, when no such treaty, agreement, or convention is available, by a law enforcement, judicial, or prosecutorial authority of a foreign country determined by FinCEN, with the concurrence of the Secretary of State and in consultation with the Attorney General or other agencies as necessary and appropriate, to be a trusted foreign country.

Foreign requests for beneficial ownership information are not yet being processed. 

Q. How should authorized recipients prepare to receive, store, and use beneficial ownership information?

The preparations necessary to receive, store, and use beneficial ownership information will vary depending on the type of authorized recipient. Those interested in accessing beneficial ownership information should first review the Beneficial Ownership Information Access and Safeguards Rule (and the relevant regulations at 31 CFR 1010.955). Depending on the type of authorized recipient, the requirements may include, but are not limited to, the agency:

  • establishing standards and procedures to protect the security and confidentiality of beneficial ownership information received, including procedures for training agency personnel on the appropriate handling and safeguarding of such information;
  • providing to FinCEN initially, and annually thereafter, a report that describes the standards and procedures that the agency uses to ensure the security and confidentiality of any beneficial ownership information received;
  • providing to FinCEN initially, and thereafter semi-annually, a certification by the head of the agency, on a non-delegable basis, that the agency has standards and procedures that appropriately implement the security and confidentiality requirements;
  • establishing or designating, to the satisfaction of FinCEN, a secure system for BOI storage;
  • establishing and maintaining a permanent, auditable system of standardized records of the agency’s requests for beneficial ownership information including, for each request, the date of the request, name of individual who makes the request, the reason for the request, any disclosure of such information made by or to the requesting agency, and other information or references necessary to reconstruct reasons for the request;
  • conducting an annual internal audit to verify that information obtained from FinCEN has been accessed and used appropriately and in accordance with the established standards and procedures, providing the results of that audit to FinCEN upon request; and
  • cooperating with FinCEN’s annual audit of the adherence of agencies to the security and confidentiality requirements to ensure that agencies are requesting and using the information appropriately, including by promptly providing any information FinCEN requests in support of its annual audit.  

Q. Although financial institutions subject to customer due diligence requirements are not currently required to access the beneficial ownership IT (BO IT) system, what are the current supervisory expectations if they choose to access beneficial ownership information from the BO IT system, when access becomes available to them?

FinCEN anticipates extending access to the BO IT system to financial institutions subject to customer due diligence requirements under applicable law, along with their supervisors, in the spring of 2025. FinCEN intends to provide additional guidance regarding any specific supervisory expectations for financial institutions that choose to access the BO IT system prior to those institutions receiving access to the system.

Rose Redman No Comments

Second Quarter Annual Report Filing Deadlines by Jurisdiction (2024)

Here’s a quick rundown of annual report filing deadlines, by jurisdiction, for the second quarter of 2024. As always, the Incserv team is here to help and answer any questions you may have!

April 1

  • Georgia
  • New Hampshire
  • Tennessee*
  • Washington, D.C.**
  • Nebraska***

*In Tennessee, annual reports are due the first day of the fourth month following an entity’s fiscal year end date.

**In Washington, D.C., entities file annual reports biennially, or every other year.

***In Nebraska, this deadline applies to LLCs only in odd numbered years… so not this year, but next!

April 15 

  • Mississippi
  • Maryland
  • North Carolina*

*In North Carolina, annual reports for LLCs are due on April 15, but for corporations, they’re due on the first day of the fourth month following an entity’s fiscal year end date.

May 1

  • Florida
  • Rhode Island
  • Arkansas

May 15

  • Michigan, but corporations only.

June 1

  • Maine

June 30

  • West Virginia
  • Kentucky

Incserv Annual Report Filing Services

At Incserv, we offer turnkey annual report filing services to minimize headaches and ensure jurisdictional compliance. Learn more about Incserv’s annual report filing services.

Incserv No Comments

Team Member Spotlight: Rhonda Wilkins

At Incserv, our people are what make the difference – and we’re excited to introduce the folks that make this place special. Each quarter, we profile an Incserv team member, sharing a little bit about what they do, how they got here and what matters to them outside the world of incorporating services. In this installment, we sit down with client services representative, Rhonda Wilkins. Enjoy!

 

Thanks for taking the time to chat, Rhonda. Let’s start with a little bit about your role at Incserv. Let’s start with the obvious! When did you start working at Incserv and tell us about your position?

Thanks! So, I started working at Incserv in April 2022. I’m a Client Services Representative for the Corporate Division. 

What is the corporate division focused on? 

It’s a little bit of everything. I help with filings not only for Delaware, but jurisdictions nationwide. So it could be anything from EIN filings, company formations and qualification documents to nationwide document retrieval, beneficial ownership information report filings and document preparation such as affidavits and incumbencies. Each day it’s a little different! 

Sounds like you appreciate the variety.

I do. It keeps the job interesting! Every email, every phone call… They all have different asks from our clients.

Anything new and exciting that you could tell us about?

There is a new requirement from the Financial Crimes Enforcement Network that recently went into effect on January 1, 2024. It’s related to beneficial ownership reporting and virtually every entity in the United States has to comply with it. Our team is tasked to reach out to all clients and help them with their beneficial ownership reporting. This is all being done to help stop fraud and money laundering. It’s designed to help prevent terrorism funding and strengthen national security.

That sounds like a massive undertaking.

It is. We started by creating a whole new email system to help organize the federal request. We then reached out via email to all of our clients with the task of providing the names and beneficiaries of their companies through an intake form. We can either do it for them, or they can submit on their own. It can get complicated so I’m there to answer questions, provide support and help them through the process. 

Even though it seems like a tedious job, I like it. It’s the same for when you are doing a large filing for a client. There could be several documents in several states. This one is done, this one has an issue…it keeps you focused and alert!

Tell me about your team. How many people do you work with on a daily basis? 

There are about 10 of us in the corporate division. Some process large, multi-state filing requests and others are focused solely on Delaware. I do a little of everything!

That’s the truth. Talk to me about the Incserv company culture.

Incserv has a great office atmosphere. Everyone here gets along and works together and helps each other out. It’s refreshing. I’ve worked at other offices the environment was very draining. Here, I’ve never felt like that. 

Well, we’ve talked a lot about work. What about your free time? Favorite things to do? 

I work another job on the weekends so I don’t have much free time. But when I do I spend time with my boyfriend, Michael, and our dog Ricky by trying new wineries and breweries in the area. We also really like going to car shows.

rhonda

Car shows? Say more.

It started in 2020 when I got my car, a Lexus IS 300. Michael and I go to local shows in Virginia, Maryland, and Pennsylvania. It’s mostly walking around to other cars and vendors and talking with the other owners about the car details. It’s something fun that we love to do together!

That’s great, Rhonda. Appreciate your time!

 

Rhonda Wilkins No Comments

Notes from the Delaware Division of Corporations’ User Meeting

A few weeks ago, members of the Incserv team attended the Delaware Division of Corporations’ User Meeting, a small quarterly gathering of registered agents that have online access to the state. Expectedly, the meeting focused on beneficial ownership. FinCEN representatives presented on the program’s recent rollout, its reception and learnings and best practices. Highlights include: 

File with a Respected, Established Vendor

Already, scams are afoot. FinCEN noted that it has seen illegitimate parties set up websites designed to look like proper BOI collection systems, only to result in the information collected selling on the dark web for upwards of $500. Whether you file on your own, with us or with a different vendor, please do your research to determine the legitimacy of the third party you work with. Find out how long a vendor has been in business. Do they have contact information on their website? Research their leadership team. Examine the domain of their website. Does it make sense? Are things spelled correctly? Use a tool like Who Is to potentially see who registered the domain and when. 

Communicating with FinCEN

Currently, the only way to communicate with FinCEN is through its online form. They will respond on a first come first serve basis. Phone support and live chat is coming. 

Slow Start for FinCEN IDs

So far, only a few thousand FinCEN IDs have been created. Here at Incserv, we use this functionality because we know that our CSRs will show up on the filings for which we are operating in an entity applicant role

Data Flow

Currently, only FinCEN has access to BOI data. Eventually, law enforcement will, followed by financial institutions (but only with consent): 

“FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company.”

No Paper… For Now

Currently, all BOI reporting is done digitally, including the ability to upload a PDF. However, FinCEN acknowledges that there is a portion of the population that needs a non-digital method to submit. FinCEN plans to address this issue soon.

As Always, We’re Here to Help

For all your BOI needs and questions, email cta@incserv.com

Josh Twilley No Comments

Your Registered Agent Just Got Acquired. What Does That Mean for You?

Over the last few years, there has been a good amount of M&A activity in the registered agent space. Some have spun down, leaving their client list to the highest bidder. Some larger firms have scooped up smaller independent shops, absorbing them into bigger corporate structures. In other cases, middle market firms have merged to join forces. Private equity firms have been active in the space too, acquiring companies, maximizing bottom lines at literally all costs and eventually flipping the firm.

No matter the arrangement, M&A activity usually brings change. Sometimes it’s good change. Sometimes it’s less so. If an agent you work with was recently acquired, we’ve created a short checklist to help you ensure you’re getting the best service possible. 

 

Can you reach your agent directly, as you previously had been able to do?

Are there new systems in place that impact your access to your agent? 

Is it taking longer for your agent to get back to you?

When you place an order, is the turnaround time about what you have been accustomed to?

Has the way you are expected to place orders changed? Are you now required to enter orders into a “system”?

Are there unexpected changes in pricing or billings?

Is your order getting unnecessarily passed around in the company?

 

As the registered agent ecosystem continues to evolve, accessibility, personalized service and efficient accuracy will matter more than ever. If changes in your agent relationships have caused hiccups and delays for you and your clients, the team at Incserv – independent for 50 years and counting – is here to help.

 

Brooks Ferrett No Comments

UCC Updates: December 2023

Effective July 1 of this year, the International Association of Commercial Administrators (IACA) put forth new national forms for UCC1 (Financing Statement) and UCC3 (Financing Statement Amendment)

Almost all states accept the new 2023 forms with only a few exceptions.

A few states, such as Florida, still have their own forms that filers may use. If a filer in, say, Florida, prefers to use the new national forms, they must add a Documentary Tax Statement to the national form.  

Additionally, New York does not accept the national form at the Secretary of State or County levels. A specific form is required and accessible here.  

A complete guide detailing 2023 vs 2011 UCC form acceptance policies by state is available here

Incserv to Support Your UCC Search Needs

Built on a network of trusted and experienced partners, Incserv navigates the massive and complex web of UCC and lien filing offices scattered across the country with personalized service and support. 

Deeply experienced in UCC search logic, we deliver an individualized approach for each search request, provide appropriate follow-up to ensure proper indexing and efficiently communicate search status.

Learn more about our UCC search and lien search services.

 

Incserv No Comments

Team Member Spotlight: Justin Roper

At Incserv, our people are what make the difference – and we’re excited to introduce the folks that make this place special. Each quarter, we profile an Incserv team member, sharing a little bit about what they do, how they got here and what matters to them outside the world of incorporating services. In this installment, we sit down with legal service specialist – and military veteran – Justin Roper. Enjoy!

justin roper

Justin, thanks for taking the time to chat. Let’s start with your role at Incserv. What’s your role and when did you start? 

Sure thing. I started at IncServ in July of 2022. I work in the SOP division (Service of Process). It’s a form of data entry with a big emphasis on detail. We make sure all legal documents are accurate. 

And what is it that you really enjoy about the position? 

As I mentioned, there’s a requirement for attention to detail. It’s a very fast paced environment and the days fly by. This past May I started in the accounting department of SOP which I have been pleasantly surprised with! Definitely different from my previous career. 

That’s right! You served in the U.S. military. With Veteran’s Day right around this corner, thank you for your service! So, military to accounting. That’s a pretty big jump!

Well, thank you! I appreciate that. And, yes… a very big jump!

How did you make it?

Well, oddly enough at a music bingo night with my wife.

You’re going to have to explain this in a bit more detail!

My wife and I like to enjoy music bingo at a local restaurant. Over time, I got to chatting with Casey Pineda, Incserv’s legal services division lead. She described her work and mentioned that they were hiring. This was about the same time I was looking to retire from the military. The timing was perfect so I jumped at the opportunity. I put together my first resume, interviewed, and got the position. 

That’s a pretty incredible story. I suppose you can network anywhere! So, any similarities between the two careers?

In the military, it’s a very large operation but a very small community at the same time. Over the course of time, you seem to run into the same people. At Incserv, it’s a small community which I really like. You quickly get to know everyone. Being new to the position, everyone has been very welcoming and helpful.

Can you tell us a little about your military career?

Sure. I worked as an aircraft mechanic for the U.S. Air Force. I retired in September of 2022 after 20 years of service. 

Wow! I’m sure that job took you to different places in the world. Any favorites? 

Yes, I’ve been all over the world. Guam makes the top of the list. So do Alaska, Japan and Vietnam.

Incredible! Now, I know you love a good music bingo night. Any other things you enjoy during your free time? 

I enjoy spending time with my family – my wife and four children. They keep us busy! My oldest just started at University of Delaware. I enjoy playing video games and we like to get down to Disney when we can!

Sounds great, Justin. I appreciate your time. Thanks so much and I wish you the best of luck!

Thank you!

Steven Gibson No Comments

Federal Services Update: October, 2023

Earlier this year, we provided a federal services update that included legalization news and notes from around the world. Today, we’re sharing a few new developments. 

Egypt

The Embassy of Egypt has stated that the notary’s dry seal must be next to the signature on any document that is being submitted for legalization or authentication and not on a separate paper.

China

After conceding to the Hague Convention, The Embassy of China will no longer require authentication from the U.S. Department of State and/or legalization with the embassy. After November 7, 2023, documents destined for China should be accepted with an Apostille.

United Arab Emirates

The Embassy of the United Arab Emirates no longer requires Corporate documents to go through the U.S. Department of State. Only personal documents must go through the U.S. Department of State for processing.

With a dedicated, knowledgeable staff in our Washington, D.C. office, we’re ready to support authentications, legalizations and a variety of other federal services needs. To get started, contact info@incserv.com or call 800-346-4646.

Josh Twilley No Comments

FinCEN Beneficial Ownership Reporting Requirements “Small Entity Compliance Guide” Just Released — Here’s What You Need to Know

Since the Corporate Transparency Act was signed into law in 2021, we’ve reported on how FinCEN, or the Financial Crimes Enforcement Network, has been building out expected reporting requirements. Final guidelines were published in September of 2022, and this month, the network has released its “Small Entity Compliance Guide,” designed to “help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule.”

The full guide is available here. Below are answers to some of the most frequently asked questions related to the reporting rules. 

Is anything in the “Small Entity Compliance Guide” different from the final guidelines published last year? 

Materially, no. The final guidelines published in September of 2022 are reflected in the “Small Entity Compliance Guide” that FinCEN recently released. From our perspective, the guide is designed for easier consumption compared to the final guidelines.

What is a beneficial owner? 

Beneficial Owners are individuals who either 1) exercise substantial control over a Reporting Company or 2) own or control at least 25 percent of the ownership interest of a Reporting Company. It is notable that “substantial control” is defined broadly while the definition of “ownership” offers some exclusions (such as for minors and intermediaries).

What types of companies must report? 

The final rule expresses that domestic reporting companies and foreign reporting companies must file beneficial ownership information, or BOI, reports. A domestic reporting company is a corporation, LLC, or other entity created by filing documents with a secretary of state. A foreign reporting company is an entity created under the laws of another country but registered to do business in the United States as a result of documents filed with a secretary of state or comparable office.

fincen reporting required

What information must reporting companies submit?

At a high level, reporting companies must submit information about the entity, information about the beneficial owner and information about the person(s) forming the entity, of which there may be up to two: the individual directing that the entity should be formed and the individual physically performing the filing.

 

fincen reporting info

Are any company types exempt from the reporting requirements?

Yes. There are 23 specific types of entities that are exempt from the reporting requirements:

  1. Securities reporting issuers
  2. Governmental authorities
  3. Banks
  4. Credit unions
  5. Depository institution holding companies
  6. Money services businesses
  7. Brokers or dealers in securities
  8. Securities exchange or clearing agencies
  9. Other Exchange Act registered entities
  10. Investment company or investment advisers
  11. Venture capital fund advisers
  12. Insurance companies
  13. State-licensed insurance producers
  14. Commodity Exchange Act registered entities
  15. Accounting firms
  16. Public utilities
  17. Financial market utilities
  18. Pooled investment vehicles
  19. Tax-exempt entities
  20. Entity assisting a tax-exempt entities
  21. Large operating companies
  22. Subsidiaries of certain exempt entities
  23. Inactive entities

When should a reporting entity file? 

According to the Small Entity Compliance Guide, “If a company already exists as of January 1, 2024, it must file its initial BOI report by January 1, 2025. If a company is created or registered to do business in the United States after January 1, 2024, then it must file its initial BOI report within 30 days after receiving actual or public notice that its creation or registration is effective. However, there is pending legislation to allow entities 90 days to file their BOI report.

 

fincen deadlines 1

Are there any ongoing requirements?

Yes, but only in the case of a change in Beneficial Owner information. There is no annual filing requirement, so it is important that the Reporting Company remembers to update its BOI Filing should any of the information change.

Are there penalties for failure to report?

Indeed, there are. The Small Entity Compliance Guide state that “the willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.”

Can Incserv help with beneficial ownership filings? 

Absolutely! Contact us at info@incserv.com or call 800-346-4646.

 

All images sourced from the Small Entity Compliance Guide, FinCEN

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Team Member Spotlight: Rosa Allen

At Incserv, our people are what make the difference – and we’re excited to introduce the folks that make this place special. Each quarter, we profile an Incserv team member, sharing a little bit about what they do, how they got here and what matters to them outside the world of incorporating services. In this installment, we sit down with compliance division associate, Rosa Allen. Enjoy!

 

rosa allen

 

Thanks for taking the time to chat, Rosa. Let’s jump right in! Tell us a little about your role at Incserv and what you do? 

I work in our compliance division. I communicate with our clients and file annual reports, working closely with the Delaware Secretary of State and Division of Corporations. We interact with a lot of people day in and day out. No day is the same and I love that.

And how did you get into compliance? 

It wasn’t exactly a straight line! I was previously in the culinary arts field. I prefer ‘art’ versus food services because at my core I’m an artist. More on that later! Before Incserv, I worked for Aramark for over 11 years. I worked my way up from a prep cook to an Assistant Food Services Director. I was even inducted into the company’s ‘Ring of Stars.’

My experience at Aramark presented me with a challenge to understand the business aspect behind culinary arts. The office work – things like budget planning, meeting prep, paperwork – helped set a foundation for a love of problem solving and organization. Those skills are a necessity within our compliance department.

That’s an unexpected career switch! How did you find Incserv? 

I saw a listing on Indeed. I had really amazing first interviews with both Stacey and Rose. The rest is history. 

How long have you been working for Incserv? 

It’s been almost a year and a half now! Which is crazy to think about. I just love my job, and the team I work with.

What do you like most about it? 

Every day and even every season is a little different. January through June is extremely high-paced. Everything is coming at you, in a good way! I’m a very detail-oriented person and I love to use my time management skills and really focus on gathering and collecting information. I come from working in a high stress job so this is sort of second nature for me. Just in a new setting, of course. I love having the opportunity to talk with people all over the country. CEOs. CFOs. Large companies. Small companies. It’s exciting. You feel like an extension of their company and I love partnering with them. I also love that I can incorporate my creativity – especially when it comes to solving unique challenges.

That’s right. You mentioned being an artist at your core. What’s that about?

I love art! I write, draw, and even face paint. Being an artist is something I incorporated as a side gig with my company, A Koolinary Experience. Our culinary art spreads were even featured in Mingle Magazine in 2019 which was very exciting! I also love to spend time with my family. We enjoy movie nights; even partaking in the Alice in Wonderland Adventures and dressing up in costume.

Love it. Rosa, it was a pleasure getting to know you and what you do for Incserv. Keep up the great work!

Thank you!