Does Your Washington Business Need to Comply with the Corporate Transparency Act?
Starting on January 1, 2024, certain legal business entities registered in the State of Washington must comply with the new Beneficial Ownership Information Reporting Rule previously announced by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Moulton Law Offices recently published an online tool to assist you in determining whether your business entity is subject to the Reporting Rule. Of course, this is not a substitute for professional legal advice, so if you need to speak with an attorney, feel free to contact our offices to schedule a consultation.
Does Your Company Need to Report?
The Reporting Rule requires a covered business entity to file Beneficial Ownership Information (BOI) reports with FinCEN. Not every company or business must report. Instead, a “reporting company” is one that meets the following criteria:
- A domestic reporting company is a corporation, limited liability company, or other business entity created by filing a document with the Washington Secretary of State or a similar office organized under the law of another state or Indian tribe.
- A foreign reporting company is one that is registered to do business in Washington, another U.S. state, or a Tribal jurisdiction by the filing of a document with the Secretary of State or similar office.
Even if your business meets either of the definitions above, it may still be exempt from the Reporting Rule if it meets one of roughly two dozen exemptions. These exemptions include but are not limited to the following:
- banks, credit unions, depository institution holding companies, and money services businesses;
- securities brokers or dealers;
- investment companies, investment advisers, and venture capital fund advisers;
- accounting firms;
- tax-exempt entities or entities assisting tax-exempt entities; and
- inactive entities.
Who Is Considered a “Beneficial Owner”?
An entity that qualifies as a Reporting Company must identify its beneficial owners to FinCEN. A beneficial owner 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. Keep in mind, a Reporting Company will often have individuals who qualify under one or both of these criteria.
In the case of a beneficial owner who “exercises substantial control,” this would include any of the following:
- a senior officer of the company, such as a President, CEO, CFO, COO, General Counsel, or any person who performs a similar function regardless of title;
- any individual who has the ability to appoint (or remove) a senior officer or a majority of the board of directors or similar governing body; or
- any individual who directs, determines, or has substantial influence over important decisions affecting the business, finances, or structure of the Reporting Company.
Contact Moulton Law Offices Today
Even if you think your business has a handle on the new Reporting Rule, it is still a good idea to seek qualified legal advice if you have any questions, doubts, or concerns about your obligations. Contact Moulton Law Offices, P.S., today. We serve clients throughout the Spokane Valley, Kennewick, and Yakima.
