Corporate Transparency Act
This affects most corporations, LLCs, and partnerships formed or registered to do business in the US. The CTA has 23 exemptions that may exempt an entity from having to file a BOI report. It’s important to carefully review each exemption for its technical qualifying requirements.
The exemptions most applicable to investment advisors are the following:
Key exemptions for investment advisers:
- Registered investment advisers: SEC-registered advisers and related entities (e.g., relying advisers) may be exempt, but this exemption does not cover state-registered advisers, exempt reporting advisers, or holding companies. These entities may qualify for other exemptions such as Venture Capital Fund Adviser or Large Operating Company.
- Pooled investment vehicles: most domestic 3(c)(1) and 3(c)(7) funds qualify, but not those investing in mortgage debt obligations (3(c)(5)(c)).
- Foreign pooled investment vehicles: are covered if registered in the US, with limited disclosure requirements.
- Subsidiaries: includes entities wholly owned by a SEC-registered adviser, but not if owned by a pooled investment vehicle.
Reporting requirements:
- Entities that do not qualify for an exemption must report each beneficial owner’s name, address, date of birth, ID number, and documentation.
Filing deadlines:
- Existing entities (formed before January 1, 2024): deadline is January 1, 2025.
- New entities (formed after January 1, 2024): 90 days to file in 2024; 30 days from 2025 onwards.
While no filing is needed to rely on an exemption, it’s important to document the facts and circumstances of the reliance for compliance purposes.
You can read more about this topic in the US Department of the Treasury’s Fact Sheet.
FinCEN issued guidance for small firms here: Small Entity Compliance Guide.
Waystone Compliance Solutions’ dedicated team of compliance professionals has extensive experience in assisting firms with their FinCEN obligations. If you require more information on this topic or are interested in learning about our regulatory filing services, please reach out to your usual Waystone representative, or contact us below.