FinCEN Identifiers can make sharing data less cumbersome and helpful to Owners and Applicants
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Defining a FinCEN Identifier
A FinCEN Identifier (FinCEN ID) is a unique identifying number issued to reporting companies , beneficial owners, and company applicants by the Financial Crimes Enforcement Network (FinCEN). This identifier was introduced in response to the Corporate Transparency Act, a federal law that will become effective on January 1, 2024. The primary purpose of a FinCEN ID is to streamline the process of updating or filing a Beneficial Owner Information Report (BOIR).
Why Get a FinCEN Identifier as an Individual?
Obtaining a FinCEN Identifier is voluntary, but it can offer several advantages:
- Data Security:
One primary reason individuals seek a FinCEN ID is for enhanced data security. If you are a beneficial owner or company applicant, you may be concerned about sharing your personal data with multiple people. With a FinCEN ID, you can submit your information directly to FinCEN, bypassing the need for every company you are a beneficial owner for to have this sensitive information. This added layer of privacy can be appealing, especially for those who value confidentiality. - Efficiency:
Another significant advantage of having a FinCEN Identifier is administrative efficiency. Many individuals are associated with multiple companies, or they may act as company applicants for numerous reporting companies. Rather than repeatedly gathering and submitting the same personal information, a FinCEN ID simplifies the process. With this identifier, you can use the same number for all the companies you are involved with, and only submit your personal identifying information once to FinCEN – saving you time and effort.
How to Obtain a FinCEN Identifier
To obtain a FinCEN Identifier, individuals must submit an application to FinCEN electronically. The application process is relatively straightforward, but it requires the submission of specific information, including:
- Your legal name
- Date of birth
- Current residential address
- A unique identifying number from a non-expired qualifying document, such as a state-issued driver’s license or passport
- An image of the identifying document
Additionally, applicants must certify that the information provided is accurate and complete. The application is expected to be available through login.gov, and FinCEN estimates that it will take approximately 20 minutes to complete.
Reporting companies may also obtain a FinCEN Identifier, but they will choose to do so on their initial BOIR. Under the Reporting Company section of the form there will be a field where you can elect to get an ID immediately following the filing of the first report. The company would then benefit from entering this number in order for FinCEN to link to their previously filed report when filing any updates, corrections, or getting reported on other BOIRs.
Are You Prepared to File?
In summary, a FinCEN Identifier is a unique identifying number issued by FinCEN to streamline the process of filing a Beneficial Owner Information Report. While it is not mandatory, obtaining a FinCEN ID can enhance data security and administrative efficiency. Whether you seek to protect your personal information or save time when dealing with multiple companies, a FinCEN Identifier can be a valuable tool in navigating the complex world of financial regulations.
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