Business Account Requirements - Beneficial Owners of Legal Entities

For Our Business Customers:

When you open a new account or apply for a new loan on or after May 11, 2018, you will be required to provide information about your beneficial owners. 

A Beneficial Owner is:

• Each individual who owns 25% or more of the company.
• One individual who has significant managerial responsibility for the company.

Why We Need this Information.

Section 326 of the USA PATRIOT Act requires that financial institutions identify and verify the identity of the beneficial owners of all legal entity customers at the time a new account is opened.  The identification and verification procedures for beneficial owners are very similar to those you currently follow as individual customers.  Each time a business account is opened we are required to ask for identifying information for each individual who has beneficial ownership (25% or more) and one individual who has significant managerial control of the business.

What Businesses are Affected?

The rule applies to legal-entity businesses such as a corporation, limited liability company, and general partnership, or other entity created by a filing of public document with a Secretary of State or similar office.  Businesses such as sole proprietorships, estates, trusts, U.S. and state government entities, registered insurance companies, publicly-traded companies and subsidiaries and unincorporated associations such as scout troops, youth sport leagues are generally exempt from the requirements.

For Existing Customers:

If you open an additional account or renew or secure a new loan, ownership information must be provided.

Important Updates

In September of 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule update to Beneficial Ownership implementing the bipartisan Corporate Transparency Act's (CTA) Beneficial Ownership Information (BOI) reporting provisions.  The rule describes who must file a BOI report, what information must be reported, and when a report is due.  Specifically, the rule requires reporting companies to file reports with FinCEN that identify two categories of individuals: (1) the beneficial owners of the entity; and (2) the company applicants of the entity.

Beginning January 1, 2024, many companies will be required to report Beneficial Ownership Information (BOI) directly to FinCEN.  This reporting will need to be completed electronically on the FinCEN website by all companies who are required to report.  The FinCEN website will begin accepting filing reports on January 1, 2024.

• Reporting companies created or registered before January 1, 2024, will need to file their initial BOI reports with FinCEN by January 13, 2025.  Originally, the deadline was set for January 1, 2025.
• Reporting companies created or registered on or after September 4, 2024 that had a filing deadline falling between December 3, 2024 and December 23, 2024, now have until January 13, 2025, to file.
• Reporting companies created or registered from December 3, 2024 to December 23, 2024, are granted an additional 21 days from their original filing deadline.
• Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from the date of receiving actual or public notice of their creation or registration becoming effective to file their initial BOI reports with FinCEN.