Corporate Transparency Act in Lextree
Entity Management

Transcript of Corporate Transparency Act video


This release of Lextree focuses on the Corporate Transparency Act in the United States.

We are releasing new features to help you comply with the CTA.

This tutorial will focus on the three main features of the CTA release in Lextree.

First, you’re going to be able to enable CTA compliance tracking and features throughout the product or leave it disabled if you know that none of the entities require any CTA tracking.

Second, you’re going to be able to flag companies or entities in your registry as reporting companies or list them as exempt.

Three, you’re going to be able to assign beneficial owners from a variety of places to those reporting companies because under the Corporate Transparency Act, the definition of a beneficial owner is quite broad and unusual in some important respects.

So no matter how the beneficial owners are defined, you’re going to be able to assign people and entities from throughout Lextree as a beneficial owner into your beneficial ownership information reports.

Enable CTA Compliance

Let’s start with the new page under View and CTA Reporting Companies.

When you first come here, CTA will be disabled system-wide.

And this page will tell you that you need to go to Settings, Configuration, and a new Compliance tab to enable the CTA tracking features.

Let’s do that now.

Settings, Configuration, and there’s a new Compliance tab.

Lextree will say, do you need to enable Corporate Transparency Act tracking?

That is identifying reporting companies, company applicants, and beneficial owners.

We do, so we’ll say yes.

CTA Reporting Companies

And now we’ll go back to that View, CTA Reporting Companies, and automatically we have a list of all of the legal entities that the logged in user has access to.

So this list is still controlled by the security profile you set up for your users.

But as an additional note, this page is only available to people with editor or admin privileges.

Users with read-only access will not be able to see this information at all.

This list of legal entities will show you all of your legal entities alphabetically.

You can, of course, sort on all of these columns.

But this last column is important.

This is where you can change the CTA status.

By default, when you first log in, all the entities will be listed as exempt.

Let’s go search for Great New Co., which is a Delaware limited liability company, and we know we need to make it a reporting company.

So we just select Exempt to toggle this from being an exempt company to a reporting company.

Lextree will show us a notification that that’s been done.

And now we can access the Beneficial Ownership Information Report page from right here.

So we select Great New Co., LLC, and Lextree will display the summary information from the Entities Details page, which you will need for the BOI report.

And you’ll see that we have Part 2 on Company Applicants and Part 3 on Beneficial Owners.

Both of these are empty right now because we haven’t added any information there.

There’s a new panel over here on the right that says whether this is a CTA reporting company or not, which is what we just did, and whether it’s an existing reporting company.

Recall that under the CTA, an existing reporting company is one that has been incorporated or formed or registered prior to January 1st, 2024.

So in this case, our incorporation date is 2004, so it’s definitely an existing reporting company.

And the Corporate Transparency Act will tell you that you don’t need to file the company applicants in that case.

It’s only for companies that are formed after January 1st, 2024.

But we still need to add Beneficial Owners.

We’ll explore some of the other features on this page in a minute, but let’s go back to our main Entities Registry.

Adding Beneficial Owners from the Registry

The important thing to know about this release is that we have embedded CTA compliance throughout the product so that from a variety of places, you can build up that list of Beneficial Owners and gather the information for the BOI report.

So let’s find Great New Co. from our normal registry.

And here you’ll see the page looks as it does before, except that now we have this other panel on the right that says whether this is Corporate Transparency Act reporting company or not.

Again, whether it’s existing, if there’s a FinCEN ID, that will be displayed.

And we see no Beneficial Owners and no applicants.

Now I said that the features are embedded in the product.

25% Beneficial Owners

Under the CTA, a Beneficial Owner is either someone who owns 25% or more of the company, directly or indirectly, or has substantial control over the entity by virtue of their position and decision-making authority.

Lextree now allows you to add those Beneficial Owners under both of those tests.

We’ll go to the Ownership tab and we’ll see the owners.

We’ll see Sonoma and Jack Jones are the only owners that have over the 25% threshold.

For the moment, I’m going to ignore Sonoma because it involves a more complex legal question about being an exempt entity and how much else has to be reported.

But we’ll stay with Jack Jones and Jack is definitely, clearly a Beneficial Owner of Great New Co.

And so on this last column, we’re simply asking, is this a Beneficial Owner?

And if it is, we want to choose Copy, which is going to take all that information about Jack Jones that the Beneficial Ownership Information Report needs and copy it to that report.

And we’ll return and see that effect in just a moment.

Substantial Control

Let’s now go to the People tab and look for people who have substantial control and therefore would be a Beneficial Owner, even if they don’t own any interest, economic interest, in the company.

So here we have the Officers and Directors for Great New Co.

And there are some obvious choices here.

We have officers like David Davis, who’s the President and CEO, and Elizabeth Hoskins, who is the Chief Financial Officer.

And again, we have a column that says, is this a Beneficial Owner?

Again, for purposes of the CTA, an owner is more than an owner that we think about typically in structuring legal entities.

So let’s go in and from either of these, we can copy the information about Connie as a Beneficial Owner, and we can do the same thing for David Davis.

Beneficial Ownership Information Report

And so many of these other people that are on this particular list could easily be added as Beneficial Owners, but for purposes of this tutorial, I want to return now and see the status of our Beneficial Ownership Information Report, because you’ll see that we now have three Beneficial Owners.

And we return to this page, we again see this top panel, that same information, but now we have our Beneficial Owners, Jack Jones, Connie Clive, and David Davis.

And you’ll see we have all the information we need about them.

In the case of Jack, he has a FinCEN ID, but Connie and David do not.

Now there are a couple of important things to know about this presentation.

These cards are built to support the same organization and structure of the BOI reports from FinCEN, whether you’re using the PDF or the online form.

This is the order of information in the order it is requested.

Also, when you need to edit this information, so you’ll notice Jack Jones does not have an ID document type or a document ID number, you can edit that.

And when you do that, Lextree will save it for purposes of this Beneficial Ownership Information Report, but it will also update Jack Jones’s main record, so that when you assign him as a Beneficial Owner for another entity, all of that information will be there and will get reused.

Or if something else updates on this report and you have to refile the information about Jack, it will all simply be here again, because we’re going to save that and push it throughout the product wherever information about Jack is captured and displayed.

We use those copy features to very easily add Beneficial Owners into this entity.

Adding Beneficial Owners from Elsewhere

But it could be that you need to add Beneficial Owners from elsewhere in Lextree, or even outside of Lextree, because of their role or ownership interest, and you want to be able to do that.

We make it very easy in Lextree.

There are three buttons up here at the top that allow you to add additional Beneficial Owners.

You can add them from your entire registry of legal entities, you can add them from your entire list of contacts, or you can add them from scratch, just meaning that if they’re not in Lextree at all, you can add them in the first instance and they’ll be added here.

But let’s pick an example from our contacts.

Now maybe we know that Bob Smith has some substantial control over this entity because of his role in the corporate structure or what have you.

He might not be listed on the People tab, but because of the ownership structure and the way the organization is run, Bob really is important to this reporting company and would certainly be defined as having substantial control and therefore be a Beneficial Owner under the CTA.

So we want to copy Bob’s information.

And now we have it.

All of that is here and available to us so that as we report information about this reporting company, Great New Co., we can have the information about Bob along with the other people that we copied in here.


And so those are the three main features of the Corporate Transparency Act compliance that we’ve added to Lextree.

So you can turn on the capability system-wide.

You can focus on those reporting companies.

So everyone who’s exempt, every entity that is exempt, will not see or have this information.

But when you need to identify an entity as a reporting company, you have all of this capability designed to research and gather together in one place all of the information you need to complete the Beneficial Ownership Information Reports for the Corporate Transparency Act compliance starting right now in 2024.

We have a roadmap of additional features and enhancements.

We welcome your feedback and input at Support.

And we hope you enjoy this latest release of CTA compliance.

Remember that there is no additional charge for these capabilities.

They are simply included in our latest release.

Thank you very much.