The Role of a Company Applicant in Navigating the Corporate Transparency Act

Understanding the Corporate Transparency Act

The Corporate Transparency Act, enacted as part of the broader Anti-Money Laundering Act of 2020, mandates the disclosure of beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This legislation aims to peel back the layers of anonymity often associated with business entities, making it harder for illicit activities to hide behind corporate structures. The act requires reporting companies, including corporations and limited liability companies (LLCs), to report their beneficial owners to FinCEN, as well as other individuals, such as the Company Applicant, when required.

LegalNature's Role

The CTA defines a “Company Applicant” as an individual who either (1) directly files the document that creates a domestic reporting company or first registers a foreign reporting company to do business in the US; or (2) is primarily responsible for directing or controlling the filing of the relevant document by another, if more than one individual is involved in the filing.

When a business utilizes LegalNature's services for its formation after January 1st, 2024, a member of LegalNature’s staff steps into the role of a Company Applicant. In other words, when a customer chooses LegalNature for the formation of their business entity, and this formation occurs post-January 1st, 2024, a member of our team files the necessary documents with the state under the customer’s direction, assuming the role of a Company Applicant as defined by the CTA. Consequently, this person’s FinCEN ID is included as part of the reporting company's initial Beneficial Ownership Information (BOI) report, as required under the CTA and applicable FinCEN regulations.

LegalNature's responsibilities are primarily centered around the filing of the necessary documentation with the appropriate state authorities. However, it is important to clarify that LegalNature’s staff, as the Company Applicant, does not bear legal responsibility before the reporting company or the beneficial owners in terms of the management or operational decisions of the company, nor does it control or have any influence over how or when the company complies with applicable laws or regulations. The reporting company and its beneficial owners retain their own legal responsibilities and liabilities regarding the accuracy of the information provided to LegalNature for filing and the ongoing compliance with all applicable laws and regulations.

Our Commitment to Guidance and Support

LegalNature is dedicated to not only making the business formation process easier, but also support our customers’ efforts in achieving compliance with the latest regulatory requirements. To that end, our platform is designed to streamline the submission of BOI reports to FinCEN, lightening the administrative load for small businesses. We provide comprehensive guidance on identifying beneficial owners and company applicants, as required under the CTA. We strive for excellence in assisting our customers with their efforts in compiling and submitting the necessary information to FinCEN, supporting them in meeting their reporting obligations without undue stress or complexity.

Conclusion

The Corporate Transparency Act introduces significant responsibilities for businesses. LegalNature’s commitment to simplifying legal processes extends to navigating the complexities of the CTA, providing our customers with peace of mind and the freedom to focus on what they do best – growing their businesses.