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Beneficial Ownership

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Beneficial Ownership

New Rules Regarding Beneficial Ownership and How It Affects Your Business

Effective January 1, 2024, many companies in the United States must report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury.

UCB is committed to providing you with the information you need to comply with these government regulations. Below are key points and links for registration. In addition, our Bankers are available to assist with any questions you may have in order to navigate this process.

What is Beneficial Ownership?

Each time an account is opened for a covered legal entity, we are required to ask you for identifying information (name, address, date of birth, social security number, as well as identification documents) for each individual that has beneficial ownership (25% or more) and one individual that has significant managerial control of the legal entity.

If you are opening an account on behalf of a legal entity, you will be required to provide the appropriate documentation and to certify that this information is true and accurate to the best of your knowledge.

While we understand the information requested is personal and sensitive, we need to obtain this information in order to comply with the law. As always, we will treat all information collected with the utmost care. All information will be stored securely and handled with the same standard of privacy that we have always maintained.

Why Is The Government (FINCEN) Collecting This Information?

This new requirement is in response to the Corporate Transparency Act, enacted in 2021. This law created a beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures. A beneficial owner is any individual who, directly or indirectly, owns or controls at least 25% of the company.

Who Has To Report?

Essentially, all U.S. companies (including LLCs, corporations, and partnerships) will need to identify and report their beneficial owners to the government.

Who Does NOT Have To Report?

There are 23 entity types exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies, nonprofits, and certain large operating companies. The list of entity types can be found on FinCEN's website.

How Do Companies Report?

Reporting companies will have to report beneficial ownership information electronically through FinCEN's website. The system will provide the filer with a confirmation of receipt once a completed report is filed with FinCEN. There are no fees or additional cost associated with the registration process.

What Role Do Banks Play?

The continue complying with beneficial ownership rules under the Bank Secrecy Act, financial institutions are required to validate your registration with FinCEN and ensure that your information is current.

Instructions on how banks will complete validation have not yet been published. As soon as information is available, we will update this section to reflect our process.

Important Dates

Reports will be accepted starting on January 1, 2024. FinCEN cannot accept reports before this date.

  • If a company was created or registered prior to January 1, 2024, it will have until January 1, 2025 to report beneficial ownership information.
  • If a company is created or registered on or after January 1, 2024, it must report beneficial ownership information within 90 days of forming. In 2025, that time frame will be 30 days.

To begin the registration process, click here. While our bankers cannot complete the registration process, we are happy to assist with questions and resources. Call a banker today at 866.505.3736.