CTA New U.S. Regulations Under FinCEN - BOIR Filings
Corporate Transparency Act - Due dates and Treasury Regulations

Important Information - Applies to all US based Clients

CTA requirements under FinCEN are due by all of our US Clients by March 21, 2025.

Important Filing Requirements Under the Corporate Transparency Act (CTA)

New Business Filings After January 1, 2024

If you file for a new business or we assist you in doing so, any new business filed after January 1, 2024, is required to submit Beneficial Ownership Information Reporting (BOIR) filings within three months of starting the company.

Existing Businesses Filed Before the CTA

For companies filed before the new law took effect, the due date for BOIR filings is March 21, 2025. This filing will be required annually. If your company is exempt, we will inform you; however, we do not expect many companies to fall into this category. We charge a fee of $125.00 per company to complete this work.

Steps to Submit Required Information

If you wish to have us assist you with this matter and have not yet provided the necessary information, please use the secure link provided below to upload the following:

1. Social Security Numbers and Dates of Birth:

   • For all owners of the company.

   • If we have previously completed taxes for you, we may already have this information on file. If not, we will contact you to collect it.
     

2. Identification Documents:

   • A copy of each owner's current, unexpired driver's license (DL), ID card (ID), or passport (PP).

   • Ensure that the documents are clear and unexpired.

   • Upload these documents in JPG format.

   • The passport should include both the inside pages showing the photo and other information.

   • If you have moved or changed addresses since filing your ID or DL, provide the current information. FinCEN requires up-to-date home and business addresses.

Confidentiality and Data Protection

We store your information on our secure, fully-encrypted server in Switzerland. No documents are stored on local drives except for temporary use, and we securely shred using the highest standard shred of 35 shreds, for all local documents after uploading them to our server.

To our last known information; the U.S. Department of Defense (DOD) standards are 7 which many relate are enough to ensure sufficient shredding destruction. It should be noted that at periodic times we also shred free disk space using the same process.

We generally purge normal work files after three years, but we may retain information for as long as necessary per our policies. This information will remain confidential throughout our relationship with you.

Privacy Policy

In line with our data collection and privacy policy, we do not sell, trade, or use your information for purposes other than internal use and client work. If necessary, we will contact you before releasing your personal identification information, which may involve third parties such as banks or insurance companies.

Submitting Documents

Please use the secure link below to upload your documents. Include dates of birth and current addresses in the comments section unless the documents already have this information. Once we receive your information, we will send you a bill for the work. If we do not have your current payment information, we may contact you through the last known email address.

Time-Sensitive Matter

Do not delay—this is a time-sensitive matter that must be completed. The penalties for non-compliance are severe. Contact us if you have any questions or need further assistance.

Please contact us if you have questions. Click here (Opens in new window) to securely submit the requested documentation.

Part 1: Overview of the Corporate Transparency Act (CTA) and BOIR Filings

1. Introduction

The Corporate Transparency Act (CTA) took effect on January 1, 2024. This legislation aims to enhance transparency in corporate ownership in the U.S. and applies to all U.S.-based entities. Here's an outline of its key aspects, background, and specific regulations.

2. Background of the Corporate Transparency Act (CTA)

The CTA was enacted to prevent illicit activities such as money laundering, tax evasion, and fraud. It requires certain entities to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. Former President Donald Trump signed the CTA into law as part of the National Defense Authorization Act for Fiscal Year 2021, overriding his veto.

3. Legal Proceedings and Economics Affecting California and Other States

I have a saying in business that rings especially true in matters like these:

"The short-term gain is not worth the long-term consequences."

The Corporate Transparency Act (CTA) has faced its share of legal challenges, particularly regarding its scope and implications. Critics often cite privacy concerns and the potential burden on small businesses. However, the act’s primary goal remains clear: to enhance financial transparency and combat illicit activities. In reality, compliance doesn’t demand much time, so the so-called "burden" may be more about perception than practicality. Still, this is a sentiment some express.

Many state Attorneys General share concerns about the CTA’s impact on small businesses. Idaho, for instance, has voiced its stance on the Secretary of State’s website, arguing that the act unfairly burdens small businesses and treats them like criminals. It’s logical for AGs to advocate for their business communities, and Idaho is no exception.

This is one reason why we chose to domicile our primary corporate office in Idaho. States like Texas share a similar commitment to supporting their business communities. As the saying goes, “Go where they treat you like they care about keeping you.” Why operate in states that regulate or tax businesses into oblivion? While that may be an exaggeration, the point stands: why stay where you’re not wanted?

Consider Elon Musk’s decision to move his company out of Delaware—a former corporate haven—or Nevada’s increasing tax pressures. Jokingly, I’ve said California might one day tax you just for breathing there. In all seriousness, I respect California’s governance and its people, but it’s unfortunate that economic and other conditions are driving residents away. This exodus can’t be good for California’s legislature or for the states absorbing the influx of people and capital from higher-income areas.

That said, California offers incredible cultural experiences. If you visit San Francisco, for example, you’ll find treasures like the Opera House, the Palace of the Legion of Honor in Golden Gate Park (home to a Rodin gallery), and a vibrant food scene. California is a wonderful place to live—if you can afford it.

I have fond memories of my time in California, having attended college near San Francisco and Berkeley. Living in the Bay Area while working in the Savings & Loan industry was deeply satisfying. But as much as I admire California, businesses must prioritize profitability. They need to stay “in the green,” not “bleeding red.” Unfortunately, California’s high costs make it challenging for businesses and residents alike. While other states face similar issues, California often bears the brunt of criticism.

Economic pressures, exacerbated by the COVID-19 pandemic, have burdened many people. The migration of residents from one state to another may contribute to these pressures, but it’s not the sole cause. States, citizens, and landlords share responsibility. Greed often drives rent increases, particularly when California residents sell valuable real estate and landlords capitalize on the demand. Hedge funds and Wall Street investors, like BlackRock, have also played a significant role by acquiring large portions of the housing market. While Capitol Hill has discussed addressing this issue, meaningful action has yet to materialize.

The principle of “some for me, not much for you” seems to apply here—especially with entities like BlackRock. Greed, more than economics, has led to the extreme inflation we face in 2025. Without governmental intervention—a distant hope—this trend will likely continue. While we may not always agree with certain states or policies, it’s important to separate our views on governance from our respect for the people.

4. Subject Entities Under the CTA

The regulations do not apply to DBA's (Doing Business As) or sole proprietors considered disregarded entities, however, most multiple-member LLC's (Limited Liability Companies) and most single-member LLCs are required to file. And particularly so if the entity has elected to be taxed as an S Corporation, Partnership, or Corporation by filing IRS Forms for entity re-classification, it must comply with these new laws.

• Examples of Applicability:
  

  • Entities taxed as S Corporations, Partnerships, or Corporations. Interested in utilizing our domestic U.S. formation services, Learn more!
    

  • Entities with foreign or other control that may alter the requirements. Interested in utilizing our foreign formation and management services, Learn more!
    

  • Most Multiple-member LLC's (Limited Liability Companies) and Single Member LLC's are required to file.

  • Dormant entities that meet certain conditions might qualify for an exemption.

  • Entities like banks, credit unions, and insurance companies that are subject to federal or state oversight may be exempt.
    

  • Publicly Traded Companies are generally exempt. As well as many Non-Profits as well as those heavily regulated by the Government, including Banks, Credit Unions and Insurance Companies that may be subject to federal or state oversight.
    

  • Entities with no employees, no physical office, and no significant assets may also be exempt.

5. Specifics of BOIR Filings

The Beneficial Ownership Information Reporting (BOIR) under the CTA necessitates the disclosure of beneficial owners, defined as individuals who exercise substantial control over the entity or own at least 25% of it.

• Misconceptions:
  

  • Some believe that owning less than 10% of the company's stock exempts them from these regulations. This is incorrect. Owning less than 10% of a company's stock does not exempt an individual from the regulations. The CTA requires the disclosure of beneficial ownership for individuals who exercise substantial control over the entity or own at least 25% of it. Those who believe or state otherwise do not understand what really is true.
    

  • Transferring stock to another party to avoid the ownership threshold does not create an exempt situation. The focus is on beneficial ownership and control rather than the percentage of stock owned. If an individual maintains control over the entity and receives profits and losses from it, the regulations apply.
    

  • The primary determinant is beneficial ownership and control, which involves receiving profits and losses from the company. The primary determinant for compliance with CTA regulations is beneficial ownership and control, not merely the percentage of stock owned.

6. Stock Ownership and CTA Regulatory Requirements

Stock ownership misconceptions often lead to misunderstandings about compliance:

• Examples:
  

  • Owning even a fractional share amount of .000000000001% does not exempt one from disclosure if they maintain beneficial control.
    

  • Nominee managers, officers, or directors are not listed in filings if they are not beneficial owners. Interested in utilizing our nominee services, Learn more!!
    

Part 2: Specific Regulations and Examples

7. Regulations for True-Foreign Corporations

In cases where a true-foreign corporation (domiciled outside the U.S. and its possessions) owns a disregarded entity, the foreign corporation may not be subject to FinCEN filings under the CTA. However, if the beneficial owners of the foreign entity are U.S. residents, the situation becomes more complex.

• Complex Legal Issues:
  

  • These matters often involve intricate legal issues regarding the requirements for U.S.-based single-member LLCs owned by foreign corporations.
    

  • If your company is subject to these regulations, contact us for assistance to navigate these complexities and avoid potential problems.

8. FinCEN and QSSCs, Q-Subs, and S Corp Ownership

An example involves an S Corporation owning a DBA and filing using Form 1120S. The S Corp might also own another corporation classified as a QSSC (Qualified Subchapter S Subsidiary Corporation).

• Disregarded Entities:
  

  • The QSSC, like a DBA, is considered a disregarded entity of the S Corp by the IRS.
    

  • Although these entities have separate tax ID numbers, they are not viewed as separate entities for tax purposes.
    

  • The parent S Corp would be responsible for filing FinCEN reports, not the QSSC or DBA.
    

  • Interested in taking advantage of these and other exotic business models, it's one area where we excel. Learn more!

9. Corporations as Managers or Directors

It’s important to understand the distinction between corporate roles and beneficial ownership:

• Listing of Beneficial Owners:
  

  • Even if a corporation's stock is owned by a C Corp and listed as a manager on an LLC, the beneficial owners of the C Corp must be listed.
    

  • The actual owners receiving the money will be the final filers of FinCEN.

10. Privacy and Legal Implications

Maintaining privacy is essential, and while this is not meant for nefarious purposes, it’s crucial to understand the legal implications:

• Arm’s-Length Transactions:
  

  • Q-Subs and DBAs must maintain arm’s-length transactions with the parent entity.
    

  • Failing to keep separate books can result in legal complications, including piercing the corporate veil.

11. Complexity and Legal Assistance

Engaging in complex business structures and maintaining privacy requires legal expertise:

• Lawsuits and Economics:
  

  • Exotic business structures can be difficult to trace and pursue legally.
    

  • Hiring attorneys for such matters can be costly and may not always reveal the true owners.

12. Privacy Measures

For clients concerned about privacy, we offer services to protect their identity and assets:

• Use of Secure Services:
  

  • We utilize secure email and server services based in jurisdictions known for stringent privacy laws, such as Switzerland.
    

  • We can assist you in setting up and developing extensive protective procedures in the areas of cyber security and more.

13. Penalties and Treasury Regulations

1. If a company fails to file its Beneficial Ownership Information (BOI) report as required under the Corporate Transparency Act (CTA), it could face serious consequences, including:
   

2. Financial Penalties: Non-compliance may result in fines of up to $500 per day until the report is filed. These penalties could increase later on.
   
   Update March 2, 2025. The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.
   
   

   “This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
   
   Notes: Keep in mind this Penalty Abatement as it may be; does not apply to foreign reporting entities (Companies) nor does it apply to resident aliens, or non-resident aliens As noted by the Treasury further updates will be forthcoming in relation.
   
   Refer to Section 2 Above (Background of the Corporate Transparency Act (CTA)): Treasury Secretary' statement seems a bit odd to us considering Mr. Trump is the one who signed the CTA into effect? Overriding his own veto when he did so in 2021. Now he's taking credit for seemingly solving or working on a problem he himself created?
   
   

3. Criminal Charges: Persistent failure to comply in filing BOI could lead to criminal penalties, including potential imprisonment.
   

4. Legal and Operational Risks: Non-compliance might raise red flags with regulatory authorities, potentially impacting on the companies' ability to operate smoothly.
   
   

It's crucial to meet the BOI filing deadlines to avoid these penalties or perceived issues that may be the case. If you're unsure about your obligations contact us and we will help determine if you do need to file. Keep in mind, most entities that we work with as of March 1, 2025, are going to be required to file.

14. Conclusion

Understanding and complying with the CTA and FinCEN regulations is essential for protecting privacy and avoiding legal issues. If you need assistance with these complex matters, contact us to ensure proper compliance. And if you are interested in structuring a business model for the proper asset protection; whether it is in the U.S. or abroad, contact us. We are quite confident that we can provide your business with the means to ensure your privacy and personal protection as well as to safeguard your assets.

Contact us for more information or Learn more! about our services in these and the multiple other service areas we offer to both businesses and individuals.

And remember, "We love referrals!