This article was originally posted on Steve Leimberg’s Business Entities Email Newsletter Archive Message #296.
Under the Corporate Transparency Act, certain information about the Beneficial Owners of certain ‘small’ entities must be provided to the Financial Crimes Enforcement Network of the US Treasury Department. When a trust is an equity owner of a reporting company, it can create significant reporting requirements for individuals named as powerholders in the trust. Which positions in a trust rise to the level of being a Beneficial Owner are based on the ‘[p]articular facts and circumstances…’ of that trust. While FinCEN updated their Beneficial Ownership Information Frequently Asked Questions on April 30th and provided additional guidance on trusts, that guidance is in many cases ambiguous and there are many unanswered questions that create a minefield of issues for both clients and practitioners to address.
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