Vol. 41 - December 2023 | ©2023 by Vidal, Nieves & Bauzá, LLC. All rights reserved.
The Corporation´s Division at the Puerto Rico Department of State has been issuing notices reminding users of their online page that, effective January 1, 2024, all domestic and foreign entities registered to do business in Puerto Rico will, with limited exceptions, be required submit information about their beneficial owners directly to the Financial Crimes Enforcement Network of the Department of the Federal Treasury ("FinCen") pursuant to the Corporate Transparency Act adopted by Congress (the “Act”).
APPLICABLE TO WHOM?
The Act mandates certain entities (“Reporting Company”) to submit reports containing beneficial ownership information to FinCEN (“BOI Reports”) within specified timeframes. The BOI Reports must include information about the reporting entity and two distinct groups of individuals: (1) beneficial owners, and (2) company applicants. The Act defines a “beneficial owner” as an individual who exercises substantial control over the entity or owns or controls at least 25% of the ownership interest of the entity. On the other hand, a “company applicant” is an individual who directly submits or bears primary responsibility for filing the document that creates or registers the company.
WHO IS EXEMPTED?
The Act grants exemptions to twenty-three (23) different types of entities from the reporting obligations. Thus, entities meeting the specific criteria found in the Act for any of the following exemptions are not required to submit the BOI Reports to FinCEN.
Reporting Company Exemptions:
Securities reporting issuer
Governmental authority
Banks
Credit unions
Depository institution holding companies
Money services business
Broker or dealer in securities
Securities exchange or clearing agencies
Other Exchange Act registered entities
Investment company or investment adviser
Venture capital fund adviser
Insurance companies
Insurance producers licensed by the state.
Commodity Exchange Act registered entity
Accounting firm
Public utility
Financial market utility
Pooled investment vehicle
Tax-exempt entity
Entity assisting a tax-exempt entity
Large operating company
Subsidiary of certain exempt entities
Inactive entity
WHEN MUST A REPORTING COMPANY FILE?
In accordance with the US Treasury Department Regulations, beginning on January 1, 2024, BOI Reports are required to be electronically submitted through FinCEN's secure filing system, as follows:
Reporting companies established or registered before January 1, 2024, must in a timely manner and no later than one (1) year (January 1, 2025), submit to FinCen their initial BOI Report.
Reporting companies established or registered on or after January 1, 2024, will be granted a 30-day period following the receipt of notice regarding their company's creation or registration to submit their initial BOI Reports before FinCen.
In the event there is a change in the information of the submitted BOI Report, the Reporting Company must provide FinCEN with a report updating the relevant information within thirty (30) days after the date on which the change occurred.
WHAT INFORMATION MUST BE SUBMITTED?
Beneficial Owner and Applicant information:
Full legal name
Date of birth
Current residential or business address
Unique Identifying number from an acceptable non-expired identification document, such as a passport, driver´s license or other government issued ID
It is important to note that only entities organized on or after January 1, 2024, are required to report information regarding an Applicant.
Reporting Company Information:
Full legal name
Trade name, if any
Complete current US address
IRS Taxpayer Identification Number (TIN), including an Employer Identification Number (EIN)
PENALTIES FOR NOT COMPLYING WITH ACT
The intentional failure to report an accurate and current BOI Report to FinCEN, or the action of supplying false or fraudulent details, may result in civil and/or criminal penalties of a $500 fine for each day that the violation continues or has not been remedied up to $10,000, imprisonment, or both.
Should you or your company have any questions with respect to the filing of the BOI Report and its general and specific requirements, you may contact the attorneys at Vidal, Nieves & Bauzá, LLC, at info@vnblegal.com a corporate law firm with special emphasis on energy and environmental matters, corporate, tax, transactional, real estate and insurance practices. Feel free to browse our webpage at www.vnblegal.com.
Vidal, Nieves & Bauzá is located at Suite 110, T-Mobile Center.
