Who Is Considered A Company Applicant Under The Corporate Transparency Act?

Understanding Beneficial Ownership Information Reports

Who Is A Company Applicant Under The Corporate Transparency Act?

The Corporate Transparency Act requires most entities to file beneficial ownership information reports with the Financial Crimes Enforcement Network (FinCEN). On that report, entities must disclose their beneficial owners. In addition, entities formed on or after January 1, 2024 must also disclose their “company applicant(s).”

A company applicant is the individual or individuals responsible for filing the foundational documents that breathe life into a legal entity. Whether it’s a corporation, a limited liability company, or a similar entity, the company applicant is the person responsible for the actual registration of the company with the appropriate state authority.

A company applicant might be an attorney, an accountant, or a designated agent specializing in company formation services. It’s also possible for one of the future officers or directors of the company to act in this capacity.

The Company Applicant’s Responsibilities

The responsibilities of a company applicant extend beyond mere paperwork. They are tasked with providing accurate information that will form the backbone of the company’s legal existence. This may include, depending on your state:

The name of the company
Its principal place of business
The names of the initial directors or managers
The registered agent for service of process
Any required information about the company’s purpose and operations

Under the Corporate Transparency Act, the company applicant is also a subject of reporting. Their details must be disclosed as part of the beneficial ownership information report to FinCEN. This measure aims to peel back the layers of anonymity that have historically cloaked the origins of legal entities, making it harder for illicit activities to hide behind corporate structures. It is imperative to understand who is a company applicant under the Corporate Transparency Act.

The Corporate Transparency Act’s Definition of Company Applicant

The Company Applicant is defined as:

Direct Filer: This is the individual who directly files the document that creates a domestic reporting company or the individual who directly files the document that first registers a foreign reporting company. This individual would have actually physically or electronically filed the document with the secretary of state or similar office.
Individual Who Directs or Controls the Filing Action: This is the individual who was primarily responsible for directing or controlling the filing of the creation or first registration document. This individual is considered a company applicant even if they did not actually file the document with the secretary of state or similar office.

It’s important to note that no reporting company will have more than two company applicants. Additionally, only certain reporting companies must include information about their company applicants in their beneficial ownership information reports—specifically reporting companies created or first registered on or after January 1, 2024.

Reporting companies must disclose the following information on their beneficial ownership information reports about their company applicants:

Full legal name
Date of birth
Complete current residential or business street address
A unique identifying number from an acceptable identification document (such as a passport or driver’s license)
An image of the identification document from which the unique identifying number was obtained

The Implications for Your Business

Whether you’re forming a new entity or seeking to comply with the Corporate Transparency Act, our team at Kim & Rosado LLP is here to provide the expert guidance and meticulous attention to detail that your business deserves. We invite you to connect with us, explore our extensive experience, and partner with us in navigating the complexities of business formation and compliance.

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