Client Alert: Commonwealth Trust Company CTA Filing Information

As we wrote about earlier this week, there has been a new development with the Corporate Transparency Act that has temporarily paused enforcement. Here is our advice for our clients at this time.

Many of the trusts for which Commonwealth Trust Company (“Commonwealth”) currently serves as Trustee hold interests in privately held entities.  Under the Corporate Transparency Act (“CTA”), this means that many of these Trusts will need to be reported as a beneficial owner of those entities.  Referred to under the CTA as “reporting companies,” these privately held companies include those created in or registered to do business in the US.  For newly created entities, the beneficial ownership reports are currently due within ninety (90) days of creation of the entity.  For entities created prior to January 1, 2024, the filing deadline was January 1, 2025; however, as a result of a recent decision in the US District Court for the Eastern District of Texas, the US government has been enjoined from enforcing the January 1, 2025, deadline.  

We do not at this time know whether the government will ultimately impose a new deadline, appeal the matter and be permitted to enforce the current deadline, or be permanently banned from enforcing any filing requirement.  According to FinCEN’s website, the government’s current instructions include a request that reporting companies continue to voluntarily file the beneficial ownership reporting.  

At this time, we would like to ensure that all clients are in possession of the information needed to report their trusts as the beneficial owner of privately held entities whenever the deadline is made clear.  Experts are recommending that to report a trust, the responsible parties include the trustee, a named Investment Adviser, any named Distribution Adviser, and any other individual with power over the decisions of the trust under its governing instrument.  For purposes of reporting Commonwealth as trustee of your trust, we believe at this time that you need only report our corporate name and not the names of individual Commonwealth employees (we are an exempt entity under the CTA).   Please report Commonwealth as trustee simply by reporting the name “Commonwealth Trust Company.”Additional information about the CTA and specific instructions regarding the online reporting process, including step-by-step instructions, can be found at https://fincen.gov/boi and https://boiefiling.fincen.gov/help. 

Commonwealth Trust Company is pleased to provide this article as a guide. Commonwealth Trust Company is not engaged in the practice of law and is not providing legal advice by the provision of these materials. Commonwealth Trust Company recommends that clients seek the opinion of their attorney regarding the specific legal and tax issues addressed in this article.