What is a Company Applicant?
The implementation of the Corporate Transparency Act (CTA) is here, which is resulting in procedural changes for the formation of Delaware companies. The new Act now requires the reporting of the Beneficial Owners along with the “company applicants”.
When forming a new Delaware company, a topic that is sure to be on the minds of entrepreneurs is who or what is considered a company applicant? The answer to this question is straightforward as the company applicant is the individual who directly files the Certificate of Formation for an LLC or Certificate of Incorporation for a Corporation formation with the Delaware Secretary of State for approval.
Another important factor to consider is that there can be up to two company applicants during the formation process. The one that completes the submission to the Delaware Secretary of State will be considered a company applicant. Also, the individual that signs the Certificate will generally be considered a company applicant. There cannot be more than two company applicants.
For those that have worked with Harvard Business Services, Inc. (HBS) to form Delaware companies in the past, it was custom for HBS to sign the Certificate of Formation as the Authorized Person or Certificate of Incorporation as the Incorporator when preparing the formation documents and filing the Certificates with the state for approval. With the new Act in place, HBS will no longer be able to sign the Certificates as the Authorized Person or Incorporator and will require the individual to sign the documents prior to filing them with the state. Once the Certificates are signed HBS can proceed with filing the documents for approval.
Below are important points regarding a company applicant.
- The company applicant can be located anywhere in the world. Clients from all around the world can form Delaware companies and conduct lawful business activities unless part of a restricted country (Cuba, Iran, North Korea, Syria and Russia).
- The signer can be an attorney, tax professional or anyone else the company’s creators assign to complete this task. The signer can also be a Director/Shareholder or Officer of a Corporation or Member/Manager of an LLC.
-The one that completes the submission to the Delaware Secretary of State will also be considered a company applicant as well. Therefore, there can be up to two company applicants during the formation process. Although HBS cannot sign the Certificates as the Authorized Person or Incorporator, HBS can still file the Certificates for approval in Delaware which would, in turn, also make HBS a company applicant during the filing process. In fact, HBS will be considered the company applicant for every entity HBS electronically files with Delaware.
For example, if a client wants to form a new Delaware company, the person signing the document can be the client themselves. This will, in turn, make the signer one of the company applicants. Once the individual signs the Certificate, HBS can then file the Certificate with the Delaware Secretary of State for approval and will then be considered the second company applicant.
Once the company is formed, the company will typically need to submit the FinCEN (Financial Crimes Enforcement Network) Beneficial Ownership Report with FinCEN directly. During this process, the company will need to specify the company applicants who directly filed the document with the state that formed the entity, as well as the individual who was responsible for implementing the filing by signing the Certificate. HBS will provide the necessary HBS FinCEN information to those who require it for the report after the company is formed.
-If your company is formed before January 1, 2024, the FinCEN Beneficial Ownership Report will be due by January 1, 2025.
-If your company is formed on or after January 1, 2024, the initial report is currently due within 90 calendar days after the formation of your company.
After forming the Delaware company, if clients need assistance with the Beneficial Ownership report with FinCEN, we are excited to announce our collaboration with FincenReport.com, as highlighted in our recent press release. Through this partnership, our clients with Delaware registered companies can effortlessly file beneficial ownership information (BOI) in compliance with the Corporate Transparency Act (CTA). FincenReport.com provides an intuitive and secure online platform, ensuring convenience, peace of mind, and full compliance with regulatory requirements. Learn more about this seamless solution by reading our press release, here.
Contact us with any questions about company applicants or the FinCEN Report, as we’re always happy to assist!
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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