Digging Deeper Into the Meaning of “Company Applicant” Under the CTA
Only entities formed or registered to do business in the U.S. on or after January 1, 2024 are required to disclose the entity’s Company Applicants in its BOI Report. Entities formed or registered to do business prior to 2024 are required to disclose their Beneficial Owners but do not need to disclose their Company Applicants. Having to dig up who formed/was in charge of forming entities created years ago would have been a nightmare for many companies. Luckily, this won’t be necessary.
An individual qualifies as a Company Applicant of a Reporting Company if that individual:
Directly files the document that creates or registers the Reporting Company; or
Is primarily responsible for directing or controlling the filing that creates or registers the Reporting Company, if more than one person is involved.
Note that based on the above language, each Reporting Company will have at least one Company Applicant (i.e. the person that directly files the document creating/registering the entity) and will have no more than two.
The individual that “directly files” the document will typically be either (i) the person that submits a formation or registration filing to the secretary of state’s (or similar) office, which may be an employee at a third party service provider (if one is used) or an individual submitting the filing on their own or on behalf of their employer, or (ii) the person that physically walks a formation or registration filing into the applicable secretary of state’s (or similar) office.
The individual “primarily responsible” for directing or controlling the filing will be the individual responsible for making the decisions about the filing, including how it is managed, what content the filing includes and when and where the filing occurs. For example, even if an attorney instructs a paralegal to complete the filing document, with a third party service provider then directly filing the document, the attorney, rather than the paralegal, is the individual “primarily responsible” for directing/controlling the filing because they, more so than the paralegal, controlled the substantive decision making process with respect to the filing.