Effective January 1, 2024, Federal law requires certain entities, including many small businesses, to report beneficial owners information directly to the Financial Crimes Enforcement Network (FinCEN). If clients have questions about this requirement you can access the Beneficial Ownership Information Reference Guide or e-mail _BSA Department.
Definition
BSA regulations require us to verify the identity of beneficial owners of legal entity clients, because this helps law enforcement investigate and prosecute those involved in financial crimes. We record this information during the new account opening process. A beneficial owner is someone who meets at least one of the following classifications:
- Ownership prong – Each individual who, directly or indirectly, owns 25 percent or more of the equity interest of a legal entity client
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Control prong – A single individual who has significant responsibility to control, manage, or direct the legal entity, including executive officers or senior managers (for example: Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer); or any other individual who regularly performs similar functions. This list is not all-inclusive and is dependent on the legal entity's structure.
The control prong, in general, requires one beneficial owner to be identified for each legal entity client. Every legal entity client must have one to five beneficial owners.
Examples
Client with one beneficial owner -- zero individuals with 25 percent or greater equity interests plus the control prong beneficial owner.
Client with five beneficial owners -- four individuals with 25 percent equity interests plus the control prong beneficial owner.
DeleteIdentifying Beneficial Ownership
To identify beneficial owners, collect the following information from the legal entity client:
- Name
- Address
- Date of birth
- For US persons: address and social security number or for non-US persons: other government identification number (non-US persons) of persons who:
- Own 25 percent or more of the equity interest of the legal entity
- Have controlling management of the legal entity
- Approved Primary and Secondary form of identification
Note: These individuals may or may not be authorized signers on the account and may or may not be present during the account opening process.
DeleteCIP Requirements
Click on the accordions below for more CIP requirements:
Business, Entity, or D/B/A
CIP requires us to obtain business information to verify the existence of the legal entity client. See the specific business or entity type for required documentation for opening or revising an account.
DeleteBeneficial Owner(s) and Controller
CIP requires us to obtain consumer information to verify the identity of the Beneficial Owner(s) and Controller, whether present or not, during account opening or revision. A CIF record must be created for ALL Beneficial Owners and the Controller, even if they are not signers on the account.
A Beneficial Owner or Controller not present will be required to provide a photo copy of a primary and secondary form of identification for viewing (the photo copy is to be destroyed after viewing and is not to be imaged). For acceptable forms of identification, see Client Identification Program (CIP) Requirements.
DeleteOfficer/Owners/Authorized Signers Present (Non-Beneficial Owner/Controller)
CIP requires us to obtain consumer information to verify the identity of the officers/owners/authorized signers present in the office during account opening or revision. For acceptable forms of identification, see Client Identification Program (CIP) Requirements.
DeleteOfficer/Owners/Authorized Signer Not Present (Non-Beneficial Owner/Controller)
CIP requires us to obtain at a minimum for an officer, owner, or authorized signer without an existing CIF the following information to build a Non-reporting Individual CIF:
- Name
- Address
- Date of Birth
- Occupation
Higher Risk Businesses
Depending on the situation, businesses deemed higher risk may need to provide information about beneficial ownership of the entity as follows:
- Association – authorized signers
- Campaign – campaign treasurer
- Club or civic group – authorized signers
- Corporation – officers/authorized signers
- IOLTA – authorized signers
- Limited Liability Company (LLC) – members/authorized signers
- Partnership – partners/authorized signers
- Political Action Committee (PAC) – committee treasurer
- Public funds and US government funds – authorized signers
- Sole proprietorship – owner/authorized signers