The Oklahoma Bar Journal February 2024

representing clients with entities or representing probate or trust administration clients to clearly state in engagement letters if the law firm will assist with FinCEN reporting or if the client will be responsible for keeping up with events that trigger the need for a new report. Company Applicant For entities formed after Jan. 1, 2024, the FinCEN report must include who the company appli cant was. 30 The company applicant is defined as the individual that “directly files the document that creates ... the reporting company” and the individual who is “pri marily responsible for directing or controlling such filing if more than one individual is involved in the filing.” 31 The final rule explanations specifically provide an example of who to report if a law firm is filing an entity with the secretary of state. If a paralegal or legal assistant files an entity with the secretary of state, the paralegal or legal assistant and the attorney directing the filing will need to provide their infor mation as the company applicant on the FinCEN form. 32 Due to this requirement, law firms may wish to include filing the FinCEN report in their engagement letters to simplify entity creation for the law firm and its clients. REPORTING REQUIREMENTS: WHAT INFORMATION GETS REPORTED? Reporting Company In the initial report to FinCEN, a reporting company must report the “name of the reporting company,” “any trade name or ‘doing business as’ name of the reporting com pany,” the address of the reporting

in a power of attorney manages the ownership interest? Does the death of someone that triggers an inheritance of the entity by a differ ent individual or trust change who the beneficial owner is? What if the beneficiary inheriting the entity is a minor child or a trust established for a minor child? The final rules answered some of these questions by laying out five exceptions to exclude certain individuals from the definition of a beneficial owner: (i) A minor child ... provided the reporting company reports the required infor mation of a parent or legal guardian of the minor child; (ii) An individual acting as a nominee, intermediary, cus todian, or agent on behalf of another individual; (iii) An employee of a reporting company, acting solely as an employee; (iv) An individual whose only interest in a reporting company is a future interest through a right of inheritance; (v) A creditor of a reporting company. 27 Despite these exceptions clearing up some of these questions, it will be important to advise clients that some of these exceptions are not indefi nite. Although a minor child does not need to be reported as a benefi cial owner, the final rules expressly state that the child reaching the age of majority is an event that will trigger the need for a new FinCEN report to be made. 28 Furthermore, when an estate is settled, a new report must be filed because there are new beneficial owners at that point. 29 Because these sorts of events trigger new reporting requirements, it will be important for attorneys

company or the primary location where business is conducted if the reporting company does not have a principal place of business, the state of formation of the reporting com pany and the taxpayer identification number issued by the IRS. 33 Beneficial Owners and Company Applicants (for Entities Formed After Jan. 1, 2024) When filing a report, reporting companies must provide the fol lowing information about every beneficial owner in the company and about company applicants for entities formed after Jan. 1, 2024: “[t]he full legal name of the individual,” “date of birth,” residential address and “a unique identifying number.” 34 However, if the company appli cant forms entities in the course of its regular business, you may submit the company applicant’s company address instead of the applicant’s residential address. 35 This is a particularly important exception for law firms or other companies that may provide FinCEN filings as part of their services so they may protect their employees’ confidential information. A unique identifying number may be a passport, driver’s license or some other identification document issued by the state, local government or Indian trust. 36 A photo of the document containing the unique identifying number must also be submitted. 37 Individuals who may be the subject of several reports can also apply to FinCEN to receive a FinCEN identifier to provide in lieu of submitting all their infor mation in each reporting form. 38 If a law firm will likely be filing multiple reports, it could be benefi cial to have its employees apply for FinCEN identifiers to save time.

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

10 | FEBRUARY 2024

THE OKLAHOMA BAR JOURNAL