How Do I Report a Corporate Trustee?

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In today’s regulatory environment, accurately reporting beneficial ownership under the Corporate Transparency Act (CTA) is crucial for avoiding penalties. One specific area of focus is the role of corporate trustees and how they should be reported as beneficial owners. This article delves into the nuances of how to report a corporate trustee and the conditions under which a corporate trustee can be named instead of individual beneficial owners. Understanding these aspects is essential for ensuring accurate and compliant reporting practices. 

How to Report a Corporate Trustee as a Beneficial Owner

The process for reporting a corporate trustee as a beneficial owner depends on the structure and extent of ownership the trustee holds in the reporting company. Below are the steps you should take to determining the right beneficial owners: 

Determine Ownership Proportion

Calculate the percentage of the reporting company that the corporate trustee indirectly controls through the trust. For example, if a corporate trustee owns 70% of a trust that holds 40% of a reporting company, then it controls 28% of the company, qualifying as a beneficial owner.

Consider the Conditions for Reporting the Name of the Corporate Trustee

The corporate trustee can only be reported by name instead of the individual beneficial owners if: 

• The corporate trustee itself is exempt from reporting requirements.
• The beneficial ownership threshold (25% control) is met solely through the trustee’s ownership interest in the reporting company.
• No individual beneficial owner of the corporate trustee exercises substantial control over the reporting company. The same criteria for substantial control apply as they would for any other beneficial owner.

Consider the Conditions for Reporting the Name and FinCEN ID of the Corporate Trustee

The corporate trustee can only be reported by name and its FinCEN ID instead of the individual beneficial owners if: 

• The corporate trustee itself has filed a BOI Report and has provided their ID to the reporting company.
• The beneficial ownership threshold (25% control) is met solely through the trustee’s ownership interest in the reporting company.
• The corporate trustee and the reporting company have the same beneficial owners.
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Accurately reporting corporate trustees as beneficial owners is a complex yet essential task in today’s regulatory landscape. By understanding and adhering to these guidelines, organizations can ensure they meet compliance requirements and avoid potential penalties.

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