Corporate Transparency Act
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA), which took effect in January 2024, aims to combat money laundering and financial crime by requiring U.S. companies to disclose their true owners, known as "beneficial owners". These owners are individuals who ultimately control or benefit from the company. By shedding light on beneficial ownership, the CTA seeks to hinder criminals who use anonymous shell companies to hide illicit activity.
Who needs to comply?
The legislation applies to all legal entities formed or registered in the U.S. Most Associations - including HOAs and COAs - are subject to the Corporate Transparency Act.
What does Rj Community Management and Board members need to do?
Rj Community Management and the Association Board members need to file a beneficial ownership information (BOI) report for your Association which requires basic information about the Association, identifying each "Beneficial Owner", and providing their Personally Identifiable Information (PII).
Who is a "Beneficial Owner"?
A “beneficial owner” of a reporting company is any individual who, directly or indirectly, either (a) exercises substantial control over the reporting company or (b) owns or controls at least 25 percent of the ownership interests of the reporting company.
What does the Association (Rj Community Management) need to provide?
- Its full legal name
- Any trade or “doing business as” names
- A complete current address consisting of:
- in the case of an Association with a principal place of business in the United States, the street address of the principal place of business, and
- in all other cases, the street address of the primary location in the United States where the Association conducts business.
- The state, tribal, or foreign jurisdiction of formation
- For a foreign reporting company, the state or tribal jurisdiction where the company first registers
- The IRS Taxpayer Identification Number (TIN) (including an Employer Identification Number) or where a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction, and the name of that jurisdiction
What Personally Identifiable Information (PPI) does the "Beneficial Owner" need to provide?
- Full legal name
- Date Of Birth
- Current, as of the date of report, residential or business street address
- Unique identifying number from an acceptable identification document defined as:
- A non-expired U.S passport
- A non-expired identification document issued by the state, local government, or Indian tribe
- A non-expired driver’s license issued by a state
- Image of the document with that unique identifying number uploaded (the form is mobile friendly and can use the mobile device to take the photo of the ID).
When does the Association need to file?
Entities formed before 2024 must file by January 1, 2025. Entities formed during 2024 must file within 90 days after their date of formation (or registration, in the case of a foreign reporting company).
How does the Association file?
Rj Community Management will provide the Association information and the name and contact information (email) for all Board member to FinCen, the agency receiving the Beneficial Owner information. Each Board member will receive an email invite to submit their PII securely.
Click here for an example of the email that each Board member will receive from FinCen.
How is the submitted information secured?
The FinCen website utilized Wordfence, a cybersecurity service with the following security measures included:
1. Firewall: blocks malicious traffic before it reaches your website.
2. Malware Scanner: Scans files and database for malware and other security vulnerabilities.
3. Login Security: Enhanced login security. Two-factor authentication and login attempt
monitoring.
What are the penalties for "Beneficial Owners" that do not comply?
- $591 per day (Civil Penalty)
- $10,000 and two years in prison (Criminal Penalty)