The Oklahoma Bar Journal February 2024

DEADLINES: WHEN ARE REPORTS DUE?

PENALTIES The CTA states that it is unlawful to “willfully fail to report com plete or updated beneficial owner information to FinCEN.” 44 It is also unlawful to “willfully provide, or attempt to provide, false or fraudulent beneficial ownership information.” 45 And the fines for failing to make these reports or provide fraudulent information in a report are steep. Individuals may be fined up to $500 per day, not to exceed $10,000, and/or imprison ment for up to two years. 46 Because these penalties are potentially so high, it will be important to properly advise clients if a report is required, analyze whether a triggering event has occurred requiring an updated report to be filed, and be clear in your engagement letters who will be responsible for reporting to FinCEN. and will change the way we advise clients handling business entities moving forward. When forming entities with the secretary of state, attorneys and other advisers must now analyze whether a report to FinCEN will also be required and analyze whose information to gather as the beneficial owner of the entity. Furthermore, it will be crucial to advise clients on when supplemental reports must be filed with FinCEN if beneficial owner ship changes for some reason. Chantelle Hickman is originally from northwest Oklahoma and moved to Oklahoma City to pursue a business degree at the University of Central Oklahoma then a law degree at the OCU CONCLUSION The CTA is now fully in effect ABOUT THE AUTHOR

School of Law. Ms. Hickman is now a partner at Alleman Law Firm in Oklahoma City, where she focuses her practice on estate planning, elder law, probate and guardianships.

Initial Reports – One Year or 30 Days If an entity was formed prior to Jan. 1, 2024, a FinCEN report must be filed within one year (so no later than Jan. 1, 2025). 39 Keep in mind that there is no grandfa ther exception for entities. Even if entities were created 30 years ago, they will be subject to this same one-year deadline as an entity that was formed one year ago. For entities created after Jan. 1, 2024, the report must be filed within 30 days. 40 A careful reading of the CTA and FinCEN’s final rules will be neces sary when dealing with any business entity moving forward to ensure you meet these filing deadlines. Updated Reports – 30 Days From the Time of Change If there is any change in who is a beneficial owner in a reporting company or any change in the information reported for a benefi cial owner, the reporting company is required to file an updated report within 30 days. 41 Keeping up with these changes could be very tedious for beneficial owners. If a beneficial owner moves into a new home, this will trigger the need for an updated report. 42 As attorneys, it will be important to develop best practices within your firm to alert clients about these triggers for filing updated reports and clearly lay out in engagement letters who is responsible for mak ing these supplementary reports. Corrected Reports – 30 Days If there are errors in any report submitted to FinCEN, a corrected report must be submitted to FinCEN within 30 days of learning about the error. 43

ENDNOTES

1. 31 U.S. Code §5336. 2. Id.

3. H.R. 6395 – 116th Congress (2021): National Defense Authorization Act of 2021, H.R.6395, 117th Cong. (2021), https://bit.ly/3U5bcy2. 4. House Armed Service Committee. https://armedservices.house.gov/ndaa. 5. Beneficial Ownership Information Reporting Rule Fact Sheet (Sep. 29, 2022), https://bit.ly/424B1Ai. 6. Pub. L. 116–283, div. F, title LXIV, §6402, Jan. 1, 2021, 134 Stat. 4604. 7. 31 U.S.C. 5336(c)(2)(A). 8. 31 U.S.C. 5336(c)(2). 9. 87 FR 59498. 10. Beneficial Ownership Information Reporting Rule Fact Sheet (Sep. 29, 2022), https://bit.ly/424B1Ai. 11. Id. 12. Financial Crimes Enforcement Network. https://boiefiling.fincen.gov/fileboir. 13. 31 USC 5336(a)(11)(A). 14. Oklahoma secretary of state. www.sos.ok.gov/corp/filing.aspx. 15. 31 USC 5336(a)(11)(B). 16. 31 USC 5336(a)(11)(B)(xiii)(I)&(ii). 17. 31 USC 5336(a)(11)(B)(i), (vii), (viii) & (Ix). 18. 31 USC 5336(a)(11)(B)(iv). 19. 87 FR 59498.

20. Id. 21. Id. 22. 31 USC 5336(a)(3). 23. 31 CFR 1010.380(d)(1).

24. 31 CFR 1010.380(d)(2)(ii)(C)(1). 25. 31 CFR 1010.380(d)(2)(ii)(C)(2). 26. 31 CFR 1010.380(d)(2)(ii)(C)(3). 27. 31 CFR 1010.380(e). 28. 31 CFR 1010.380(a)(2)(iv). 29. 31 CFR 1010.380(a)(2)(iii). 30. 31 CFR 1010.380(b)(2)(iv). 31. 31 CFR 1010.380(e)(3). 32. 87 FR 59498. 33. 31 CFR 1010.380(b)(1). 34. 31 USC 5336(b)(2)(A). 35. 31 CFR 1010.380(b)(1)(ii)(C)(1). 36. 31 CFR 1010.380(b)(1)(ii)(D). 37. 31 CFR 1010.380(b)(1)(ii)(E). 38. 31 CFR 1010.380(b)(4). 39. 31 CFR 1010.380(a)(1)(iii). 40. 31 CFR 1010.380(a)(1)(i)&(ii). 41. 31 CFR 1010.380(a)(2)(i). 42. 31 CFR 1010.380(a)(2)(i). 43. 31 CFR 1010.380(a)(3).

44. 31 USC 5336(h)(1)(B). 45. 31 USC 5336(h)(1)(A). 46. 31 USC 5336(h)(3)(A).

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.

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THE OKLAHOMA BAR JOURNAL