[08lhubbard]

If an entity is changing their name from Smith Siding Company, LLC to Sam Smith Siding Company, LLC, would a new Beneficial Ownership Certification be required?

Topic

[susan costonis]

If Smith Siding Company, LLC changes their name to Sam Smith Siding Company, LLC it is reasonable to assume that they would file new documents with the Secretary of State or similar office. It would be reasonable to require a new Beneficial Ownership Certification in that scenario. If your bank’s current CIP procedures require that the information is updated for a name change, it would be reasonable to follow this requirement under the Beneficial Ownership rules. Question #4 in the April 3, 2018 FAQs probably comes closest to addressing this question. Here are SOME portions of the FAQ:

Question 4: Identification and Verification: Methods of verifying
beneficial ownership information
What means of identity verification are sufficient to reliably confirm beneficial
ownership under the CDD Rule?
A. Covered financial institutions must verify the identity of each beneficial owner
according to risk-based procedures that contain, at a minimum, the same
elements financial institutions are required to use to verify the identity of
individual customers under applicable Customer Identification Program (“CIP”)
requirements. This includes the requirement to address situations in which the
financial institution cannot form a reasonable belief that it knows the true identity
of the legal entity customer’s beneficial owners.2
2. Under the CIP rules, a financial institution’s CIP must include procedures for responding to
circumstances in which the financial institution cannot form a reasonable belief that it knows the true
identity of a customer. These procedures should describe: (1) when the institution should not open
an account; (2) the terms under which a customer may use an account while the institution attempts
to verify the customer’s identity; (3) when it should close an account, after attempts to verify a
customer’s identity have failed; and (4) when it should file a Suspicious Activity Report in accordance
with applicable laws and regulations. See, e.g., 31 CFR 1020.220(a)(2)(iii).
Although the CDD Rule’s
beneficial ownership verification procedures must contain the same elements
as existing CIP procedures, they are not required to be identical to them

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