What Are FinCEN Identifiers?
To provide greater privacy and to minimize the hassle involved with such reporting, the CTA allows (but does not require) Reporting Companies, Beneficial Owners, and Company Applicants to request a “FinCEN Identifier” or “FinCED ID” from the Financial Crimes Enforcement Network (“FinCEN”). This unique, 12-digit number FinCEN ID may, in certain circumstances, be reported instead. Using a FinCEN ID shifts some of the burden of updating previously filed reports from a Reporting Company to Beneficial Owners.
Why Request a FinCEN ID for a Reporting Company?
Reporting Companies are obligated to report and update information previously submitted to FinCEN in their BOI reports. Every time a Reporting Company must report its BOI and/or Company Applicants, that filing must include the following information for those Beneficial Owners and Company Applicants:
- full legal name,
- date of birth,
- residential address,
- unique identifying number and issuing jurisdiction from an acceptable identification document, and
- an image of the identification document.
In the event any of this information changes, the Reporting Company is required to update this information with FinCEN within 30 days of the change. For example, if a Beneficial Owner moves to a new residential address then the address for the Beneficial Owner must be updated.
Some Reporting Companies are wholly owned by the same Beneficial Owners through a series of tiered entities that are also Reporting Companies. In that event, all of the Reporting Companies in the tiered ownership structure must report the same BOI and, if the BOI changes, are all obligated to update the information previously submitted in their BOI reports. In some circumstances the subsidiary Reporting Company may instead report the FinCEN ID assigned to its parent Reporting Company. If the FinCEN ID is the only information previously submitted then that is the only information required to be updated, and a FinCEN ID doesn’t change.
A Reporting Company qualifies for this BOI reporting shortcut when three conditions are met:
- the parent Reporting Company obtains a FinCEN ID and provides it to the subsidiary Reporting Company;
- the Beneficial Owners hold interests in the subsidiary Reporting Company through ownership interests in the parent Reporting Company; and
- the Beneficial Owners of the subsidiary Reporting Company and the parent Reporting Company are the exact same individuals.
Why Request a FinCEN ID for a Beneficial Owner or Company Applicant?
A Reporting Company must report and update the previously reported BOI and/or Company Applicants (as noted above).
If the Reporting Company instead reports the Beneficial Owner or Company Applicant’s FinCEN ID then the Reporting Company is only required to update the FinCEN ID, and a FinCEN ID doesn’t change (as also noted above). Beneficial Owners and Company Applicants are obligated to update the information on file for their FinCEN ID within the same 30-day time period. When a Beneficial Owner or Company Applicant updates the information on file for their FinCEN ID themselves, the update will apply to any information on file for any and all Reporting Companies.
How does a Reporting Company request a FinCEN ID?
After the Reporting Company submits the BOI report, it will immediately receive a unique FinCEN ID.
Because a Company Applicant can file and update a Reporting Company’s BOI reports, a Company Applicant can also request the FinCEN ID for a Reporting Company.
How does a Beneficial Owner or Company Applicant request a FinCEN ID?
- full legal name,
- date of birth,
- address,
- unique identifying number and issuing jurisdiction from an acceptable identification document, and
- an image of the identification document.
A driver’s license or passport would work well for this purpose as it contains all of this information including a unique identifying number. Notably, this is the same information otherwise required to be submitted on a BOI report.
After an individual submits this information, they will immediately receive a unique FinCEN ID.
Technically FinCEN allows a Company Applicant and other third parties to request a FinCEN ID for a Beneficial Owner or Company Applicant. However, obtaining a FinCEN ID for an individual requires the requesting party to create a Login.gov account, which is tied to the individual receiving the FinCEN ID. Creating a Login.gov account requires the requesting party’s email address and uses multi-factor authentication. So even though FinCEN permits a third party to request a FinCEN ID on behalf of a requesting party, in reality it is very difficult to do so. We therefore recommend Beneficial Owners and Company Applicants obtain their own FinCEN ID.
Terminating a FinCEN ID
There is currently no way to terminate a FinCEN ID. However, FinCEN is actively assessing options to allow individuals to deactivate a FinCEN ID so that they do not need to update the underlying personal information on an ongoing basis. FinCEN will provide additional guidance on this functionality upon completion of that process.
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under the Corporate Transparency Act.
