Business Compliance, BOI Report

June 27, 2024

Who is the Control Person in the Beneficial Ownership Rule?

Discover who is the control person in the beneficial ownership rule and why it matters for BOI reporting. Learn key criteria and how to comply with FinCEN requirements.

Who is the Control Person in the Beneficial Ownership Rule

Key Takeaways:

  • The control person is an individual who exercises substantial control over a company’s operations or decision-making.
  • Every reporting company must identify at least one control person in their BOI report.
  • Control persons can include senior officers, major decision-makers, and those with the power to appoint or remove key personnel.

Under the Corporate Transparency Act (CTA), businesses are required to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). A crucial aspect of this reporting is identifying the control person. But who is the control person in the beneficial ownership rule, and why is this information important?

Understanding the Control Person in Beneficial Ownership

The control person, also known as the individual with substantial control, is a key figure in the beneficial ownership rule. This individual is someone who exercises significant influence over the company’s operations, decision-making, or management. According to FinCEN’s guidelines, a control person can be identified through several criteria:

  1. Senior Officers: This includes positions such as CEO, CFO, COO, or General Counsel.
  2. Authority to Appoint/Remove: Individuals who can appoint or remove senior officers or a majority of the board of directors.
  3. Important Decision-Makers: Those who make significant decisions about the company’s business, finances, or operations.
  4. Other Forms of Substantial Control: This catch-all category includes any other means of exercising substantial control over the company.

Who is the Control Person in the Beneficial Ownership Rule? Key Considerations

When determining the control person for your Beneficial Ownership Information (BOI) report, it’s essential to consider all individuals who might meet the criteria. In many cases, especially for smaller businesses, the control person might be obvious – such as the CEO or majority owner. However, for larger or more complex organizations, multiple individuals might qualify.

It’s important to note that every reporting company must identify at least one control person, even if no individual owns 25% or more of the company. This ensures that there’s always a responsible party associated with the business in FinCEN’s records.

Summary and Next Steps

Understanding who qualifies as a control person is crucial for accurate BOI reporting under the Corporate Transparency Act. By properly identifying these individuals, businesses contribute to the transparency goals of the CTA and ensure compliance with FinCEN requirements.

Are you ready to file your BOI report? Don’t let the complexities of beneficial ownership reporting overwhelm you. We’ve integrated with FinCEN’s BOI Secure Filing System and created a user-friendly platform to file your report. This streamlined process makes it easy for you to comply with the new regulations. File your BOI report with confidence today!

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