By Howard S. Goldman, Esq.
What is the Corporate Transparency Act?
The Corporate Transparency Act (“CTA”) is a federal law enacted in 2021 to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s markets. Businesses meeting certain criteria (including all state corporations, LLCs, condominium associations, and similar entities registered to do business) must register. Regulated companies must submit a Beneficial Ownership Information Report (“BOIR”) that provides details identifying individual who are associated the report company.
Reports are sent to U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) bureau of the U.S. Department of Treasury, and this entire piece of legislation is but a small part of the National Defense Authorization Act.
Do the Reporting Requirements of the CTA Apply to Condominium Associations?
Ever since the reporting requirements of the CTA came into effect on January 1, 2024. Businesses, including condominium associations, now face a deadline of January 1, 2025, when they must file the BOIR with the FinCEN. Understanding who the “beneficial owners” are in condominium and home owners’ associations, and who must be identified in the CTA report, is determined based upon CTA regulations. Individuals who exercise “substantial control,” either directly or indirectly, over a reporting company (or in the case of a condominium association), such as all trustees, are considered beneficial owners. Individuals who own more than 25 percent of the units in a condominium or home owner’s association, such as developers who have retained many units in the project, are also identified as beneficial owners.
What Beneficial Ownership Information Must be Provided to the FinCEN for Condominium Associations?
Reporting companies, including condominium associations, are required to submit the following beneficial owner information for each of their trustees when filing a BOIR: (1) full legal name; (2) date of birth; (3) complete current address; (4) unique identifying number and issuing jurisdiction from one of the following non-expired documents: (A) U.S. passport; (B) identification document issued by a State, local government, or Indian Tribe issued for the purpose of identifying the individual; (C) state-issued driver’s license; or (D) foreign passport (if none of (A)-(C) are available); and (5) an image of the document from which the unique identifying number was obtained. Please see BOIR Filing Instructions for more details.
Trustees are rightfully concerned invasion of their privacy, having to file their driver’s license and social security number to the government. But the US Department of Treasury has assured of the private and confidential nature of the filing, much like a tax return filing. At Goldman & Pease, we are prepared to assist you throughout the process of filing a BOIR with the FinCEN, as well as answer any questions you may have about the CTA. Please contact us with any questions about your business or condo association’s CTA requirements.
