The WAY to WOW Shows
Complying with Beneficial Ownership Information Reporting
February 14, 2024
Automatically generated from YouTube captions; names and wording may contain errors.

[0:00] people making money one of the way to wow shows as you know it's Wednesday at 10:00 a.m. Pacific time and we're here to talk about professional matters running a business starting and running a business and wealth building all of those things that provide the resources for the other facets of our lives and this is uh the the fifth year of of my doing this show um although the the first couple of years under a very different for not a very yeah a very different format um but I

[0:35] just want to take a moment to thank those of you who have been with us from the beginning for your continued viewership and and your support of the show and uh I just spoke with a friend of mine yesterday who um was was very gracious in uh um spreading the news about um you know what we're doing here and and uh so so Jeffrey if if you or any of your family members are watching this or any of your Associates thank thank you very much for that I I I deeply appreciate it so today um if you saw any of our social media um posts you

[1:12] saw that I'm going to talk about a new burden on small businesses so uh the the title is probably a little edgier than what you're used to from me um but you know there there there comes a point when uh I think we have to uh I don't know be be a little be have some cander in in in in what we think is going on and and the reality is and as you'll see when we when I get into the the topic itself um this is something that um almost all large companies in

[1:48] fact I think all large companies are exempt from um now you you you can certainly make the argument well they have all kinds of other regulatory things that they have to deal with and and that's that's certainly true um in this case uh the the discussions I've had with with people about it lead me to think uh this is um not going to do what they want to do um it's kind of like um you know um situations where you know you're trying to T track down Bad actors

[2:23] um except for they're not the ones who are going to comply so all you're doing is getting you know people like you and me who who you know do our best to comply with laws and regulations putting a burden on us and and uh you know anyway so so that that's why the the the title is a little bit edgy um in any event I'm I'm going to go ahead and bring up the the presentation I have um for today so um this here's here's the title and

[2:58] um there it goes okay so like all things on the way to W shows um we're um we we base them all on the um three pillars of attainment and um today we are definitely going to be down here in the finances Realm of the Pursuits pillar um and and and you'll see why it's it's it's got that narrow Focus today so what we're what we're talking about is is the beneficial ownership information reporting regimen that is um the outgrowth of the

[3:33] corporate transparency act so um this so I was reading some more about this there there is a um sense in the United States that we are far behind the curve in dealing with the issue of of M money laundering and uh criminal activity Bad actors um coming into the United States having access to our financial markets having access to our Capital markets and in fact there's another new

[4:10] regulation um being proposed by finsen finsen is the financial criminal uh enforcement Network which is an agency of the federal government um that has the remit of um dealing with um things like um criminals in investing their money in legitimate businesses in the United States and then using those profits to further um additional criminal activity same thing with with terrorists and terrorist groups money laundering all of that is the concern of

[4:45] finen so um it was passed and I'm I'm going to go through this legislative history a little bit um so you can kind of understand how this this came to to be and and and that is that um uh it was it was made part of the National Defense authorization act so you might ask well why was a regulation designed to prevent money laundering and and and um uh um you know criminals and terrorists taking advantage of American

[5:22] financial markets in the National Defense authorization act and and generally that that that's you have that kind of thing because the National Defense authorization act the ndaa is what funds the military and so it's generally considered a must pass piece of legislation each year and so oftentimes other things that are um only distantly or sometimes not really at all related to the NDA get attached to it as writers additions to the primary

[5:58] legislation in order order to essentially get the number of votes that are necessary in order for it to pass because people who might not vote for it on a standalone basis they don't want to be when I say people um senators and congressmen who um might not vote for a a particular issue on a standalone basis um will do will vote for it as a writer to the ndaa because they don't want to be on the record as having oppose the ndaa um and and and looking like they're

[6:34] you know against U um sustaining the American Military so um what happened was um the the Act was I mean the ndaa um for uh fiscal year 2122 um was was passed I believe sometime in November December um it uh uh it included this writer the corporate transparency act um president Trump uh vetoed um the the legislation because of

[7:09] that and then the the the two-thirds uh of the of the uh Senate and and House of Representatives voted to override um president Trump's veto and so it made the the ndaa and with the CTA writer um law uh despite the fact that it wasn't signed by president Trump so um the um the the you know the result is is we have this new reporting requirement and as you'll see in a few minutes it applies to basically small

[7:44] businesses so um when we talk about beneficial ownership information we're talking about identifying individuals who directly or indirectly owner control a company okay and and we we'll talk about what that means but gener basically it means they they have a 25% or larger stake in a company okay and and so therefore um at at least in the eyes of the CTA have the ability to decide what the company is going to do

[8:21] all right so let's move to the next one all right so I think one of the um important aspects to look at is we're we're providing all of this information about who owns uh companies in which we're involved who has access to that information so uh federal state local and tribal officials have access to it in other words pretty much any government official um Can can get access to the finsen database where uh this information is kept um you know

[8:58] presumably they have a purpose for accessing it I.E they they they're they're doing a criminal investigation or they're they're working on some sort of matter and and and uh it appears that there's some kind of money laundering activity going on what whatever it is um but but but there's there I didn't find any um real restrictions on that um so so that's that's a that's pretty broad access I I would say um next certain foreign officials who submit a request

[9:33] through a US federal government agency okay now in the case of foreign officials it's for authorized activities related to National Security intelligence and law enforcement so um one would assume that that same limited you know number of reasons would also apply to domestic uh government officials okay um nonetheless um as as as unfortunately we've seen over the last number of years um related to National Security intelligence and law

[10:09] enforcement have gotten somewhat elastic so um I I'm not sure that we we should rely on um uh these these limits um when when it comes to access of the data and then foreign institutions um in certain circumstances the consent of the report reporting company so let's say um UBS which is a Swiss owned bank um wants information on a particular company um in which you have an interest so um they can request

[10:44] um access under certain circumstances but supposedly in that case finsen is going to need to have your consent before they release the information and then finally those financial institu The Regulators of these various financial institutions when they supervise those those institutions so if uh ubbs for example were to get were were to be you were to grant them information or access to the finen database with this information so the bank supervisors in

[11:19] Switzerland would also have access to that information because they're regulating UBS and so as part of their um audit fun audit functions Etc they would have uh access to that information now um it's it's interesting to note by the way and and and and again I I I read through the regulations and and I might have missed this but I don't think so as far as I could tell there are no uh countries governments that are categorically excluded from getting

[11:56] information so for example um you know some of our biggest uh geopolitical Rivals China um Iran Russia um North Korea they are not categorically excluded from submitting a request for information um which you know we might find a little bit surprising but but I I think it's something to to keep in mind and um um I mean you we all know how these things work we've seen s with the with the IRS um where uh a contractor

[12:34] released information without authorization on a a large swath of wealthy Americans um and and um on on on other groups in years previous to that so um you know I I think that um while this appears to restrict access to in to our information um I think we have to be prepared to um understand that with the creation of this database um our our you know information about our business

[13:09] interests um that go into this database are probably largely you know going going to be you know public knowledge so um nothing we can do about that as you'll see again as we get further into this the penalties for especi for willful non-compliance are very very high so um you know at least as things stand now it appears we have to um comply now um before I go any further um this this only went into effect January

[13:44] 1 of this year and uh so people are pretty new to this um your your lawyer your accountant it it may not really be on their radar um if you have any questions about whether you should report um and and and if so what you should report although I'm going to go through the this the um uh the standards here um this this isn't to say that therefore you should just go ahead and do this you you may very well want to consult with your lawyer and your accountant um before you deal with the

[14:20] boir um and and just make sure that it it is something that you want to do so I'm going through what what the issues are how to comply if you choose to comply but whether or not you comply is is is of course your choice um and and and that's something to take up uh with with your advisors okay so here we go now let's first of all let's look at which companies must report okay so first of all domestic corporations domestic corporations by

[14:56] the way when we use that term domestic here we mean they were organized in the United States um although they were corporations in in this country are organized under state law so they were organized in one of the 50 United States um as well as I believe territories like Puerto Rico Guam and the District of Colombia so those are all domestic corporations limited liability companies again domestic limited liability companies llc's and any other entities created by filing the filing of a

[15:31] document with a secretary of state or similar office in the United States all right so if you recall from a um I think a week or two ago last week maybe um I went through how to uh create your business entity and we we worked um we worked an example on the Secretary of State for California's website that is typically where where you file um the documents in order to create a corporation or an and an LLC um that

[16:07] certainly is the case um in all the states that I've dealt with although C I have not dealt with all 50 states um but but in any event um because uh corporations and limited liability companies are sort of creatures of the law right um we talk about Corporation as being a legal person because it has an identity separate from its officers and directors and shareholders all right so it's created by doing these filings now a sole proprietorship is really just you acting

[16:42] in a business capacity so you don't have to file any kind of document with the Secretary of State um at least in all the jurisdictions I've dealt in and so in that case it it would appear that that sole proprietorships are not required are not required to meet this reporting mandate okay so um if you have any questions about whether your business entity is required to file this is one of the things to take up with your advisors um before before you you

[17:18] know do anything about the boir now um as well foreign companies formed under the laws of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or similar office okay so let's say uh a corporation was formed in France okay but it does business here in the United States and so it's registered to do business here in California it does that through the California Secretary of State and so now it's required to comply with the boir okay now

[17:56] um uh um oh so um if a uh Corporation is formed in California um but um it's it's going to have um um offices in Florida for example um Florida may require that California Corporation to register in Florida as a foreign corporation okay so the reason the reason we use domestic and foreign in that context is is because it's it's not domestic to that

[18:32] state so although it's a domestic Corporation from the you from the perspective of the United States overall a California Corporation um uh needing to register in Florida is looked at by Florida as a foreign corporation but that doesn't necess that doesn't make it a foreign company and and that's why I wanted to distinguish this so a foreign company generally speaking means a Company formed outside of the United States and her territories okay all right so these

[19:07] are the two main categories so next okay so which companies are exempt okay so um first of all there are 23 categories of companies that are exempt from reporting I'm not going to go through through all of them um and and and at the end I'm going to give you some links and I'm also going to put links in the show notes where you can find all this information um but is if you go through this you'll see almost um

[19:43] well first of all government authorities are exempt you know of course um almost all of these um exempt organizations are are Financial Services uh companies and financial services oriented companies so I'll give you just a couple Investment Company or investment advisor Venture Capital fund advisor Securities reporting issuer Bank Credit Union okay these are already heavily regulated Industries they have for the most part all they already have

[20:19] I should say for the most part finen uh uh reporting requirements so the idea behind these is since they're already they already have to report to finen there's no reason for them to have to report in essence a second time okay so that that that certainly um makes sense um okay so so one through 18 that's basically um uh you know finan the government and financial oriented uh businesses okay so

[20:56] 19 exception 19 is a tax exempt entity so this is an interesting exemption because um it it essentially means a nonprofit okay or a not for-profit a friend of mine makes a distinction between those two um but in but in any event um it is interesting because there are a lot of large organizations that operate on a not on a tax exempt status and um I don't know it seems to me that

[21:32] they would be you know ripe for money laundering um if you know not necessarily for investment because they're not going to you know the the investors are not going to get a return on their investment but in terms of sort of money moving money through and and and and making the money look clean okay um tax exempt entities I think you know would do that so I don't know I find this a little bit surprising so an entity assist existing a tax exempt entity is is is also exempt um I'm not exactly sure what that is that would seem to be you know like a for-profit company but but in any event this is one

[22:09] of those categories where um you know if you think you qualify under this this number 20 exemption this is something to take up with your advisors okay next large operating companies um and and then uh 22 uh subsidiaries of EX of exempt companies I'm going to talk about that in more detail um next okay and then finally 23 an inactive entity so I suppose that makes sense if if a company is is not doing anything so then there's no reason for it to report all right so let's go

[22:44] to part two of which companies are exempt okay the large operating company exemption so to qualify as a large operating company it directly employs more than 20 full-time employees in the United States okay so if you were employing only 19 presumably you are not exempt okay or if you're employing you know 18 in the US and you know three in um uh Mexico um you would not be exempt because you have to have more than 20

[23:21] that in other words presumably 21 right 20 and a half employees I'm not sure how that works you have I don't know very very short employee I don't I don't know um but anyway you directly employ more than 20 full-time employees in the United States okay um by the way you notice that this um incentivizes companies to employ people part-time to stay under this exemption you know I whatever okay next has an operating Presence at a physical office in the United States in other

[23:56] words they have they have a bricks and mortars um presence here in the United States somewhere um now I don't I don't know about this and again this is all new but if you operate from your home okay um does that mean that you don't have a physical office in the US right how is that going to be interpreted I I I I don't know this is something to take up with your advisers okay uh filed a federal income tax or

[24:32] information return United States for the previous year demonstrating more than $5 million of gross receipts okay so you can see that this is really targeting uh businesses with $5 million and less of gross receipts and sales that's why I call this a burden on small businesses because five million five million and less is that that's really a small business United States you say wow I would love to make $5 million in my business I I I get it I get it but the reality is when you think about it that's not a tremendous amount of of

[25:08] Revenue okay um um so the the the great the greater than $5 million threshold applies on a Consolidated basis so if the company has operating subsidiaries uh wholly owned subsidiaries or divisions or whatever and maybe it has um you know there's the there's the operating company and then there's uh three subsidiaries you you it's it's the the Consolidated gross receipts or sales

[25:43] that are um relevant not the just the gross receipts or sales um for the operating for for the parent company okay so um the an operating subsidy May only pay over to the parent company a portion of its net revenue for example okay um and that that would that could make it look like the gross receipts of the operating company are are much lower okay so for the purposes of boir excuse me the the gross receipts of

[26:20] all the subsidiaries need to be added to the gross receipts of the parent company to see whether they exceed the 5 million threshold okay now you um you don't um need to consolidate headcount um in order uh or um you you you you can't consolidate headcount in order to be exempt okay so um you know why you can consolidate dollars but not

[26:56] headcount was wasn't able to to Fig find that out okay now subsidiary exemption any entity whose ownership interests are controlled or wholly owned directly or indirectly by specified exempt entities including large operating companies okay so if there's a large operating company that is exempt that has subsidiaries so then the subsidiaries of that company are exempt as well this is another area where you know you you may be um you know involved in a subsidiary company

[27:33] you may even have ownership in it okay um and and and and but because there's a parent company to which you report um if you may not have to uh you know comply with the boir um because your the large company of which you're a subsidiary may be exempt and therefore you're exempt again this is something I I'm going to repeat this probably a hundred times in this presentation this is something that you need to check out um with with your with

[28:09] your lawyer with your accountant um before just going ahead and complying okay next okay so if you want um more about reporting companies um you can um there you know here's I'm going to put this um uh this URL in the show notes you can go you can go to that okay and and you can see um additional information there okay and then let's go to the next one okay oh wait I'm G to go back here

[28:44] um I'm just gonna um share my screen real real quickly okay so you should be you should see now Ben beneficial ownership information reporting okay and here's there's a whole list of um subjects on which um you can you know look up you you can get you know frequently kind of frequently asked questions FAQ so here's um reporting companies here's the whole section on them okay so for example are certain corporate enties such as

[29:19] statutory trusts business trusts or foundations reporting companies right so you click on that um you know state laws vary on such trusts about whether they're required so you know again look into all of this before you just assume um that that you have to comply okay all right so um I just want to show you that that database uh or that that um list of questions because um I would look through that um before you determine

[29:54] certainly on your own whether to comply um but um you know if you have any kind of um uh you know slightly unusual ownership structure so then um you know it's you definitely need to look into into this more deeply and that's one place to start um getting some information okay so what is the deadline to report so if if you're if you are a reporting company or or you have a reporting company and it existed before

[30:29] January 1st of this year 2024 then you have until January first of next year 2025 to report I.E you have a year okay now part of that year is over so you got about what 11 and a half months left uh I'm sorry 10 and a half months left okay so you do have time to comply and I I think that's reasonable because you know you've seen a number of questions have come up already that you may need to investigate and so it can it can take time and and by the way you can call you might call your lawyer today and say hey

[31:04] I I saw this presentation on this boir um do I have to comply with this don't be surprised if your lawyer says I don't know what you're talking about okay I've seen one small article about this in the Wall Street Journal it was just last week I believe um and and so I'm not sure that I've talked to several people um I I they're they haven't heard about it okay nobody I've talked to has heard about it um so uh um you know this is definitely something that you know it

[31:39] can it's it's very reasonable that your advisers would come back at you and say I need to look into this I can't I can't you know answer your questions off the top of my head okay now if the company was created or registered on or after January 1st of this year and before January 1st of next year then you have 90 days after receiving actual or public notice of its creation uh or registration is is effective okay you have 90 days to

[32:14] report so um you know again that's kind of interesting because um all of this is new and so you know the reality is um I think people advising business businesses need to get up to speed on this um very quickly um because if you're if you form an entity this year you only have 90 days to comply if in fact you're a reporting company so making that determination um you know the timeline is shorter than if you know your company was formed basically last year now you can see going forward if

[32:52] your company is created or registered on or after January 1st of next year 2025 you only have 30 days to register um if you are indeed a reporting company so I think the idea is that is that by next year this should all be figured out and so um you know you you should be able to comply uh quickly so um you know this this isn't something to just ignore and hope it will go away I don't think it will um and and so um and so you know

[33:31] get on top of this um if you if for sure if you have a corporation or an LLC you need to look into this now if you have some kind of some other type of entity your limited partnership your uh general partnership um it you know it's it's not at all clear that that you have to register but I would certainly look into it and make sure um uh that that you are um you know that that you indeed don't have to report so just got a little message here gon somebody um okay so th those are those

[34:08] are the deadlines to report all right so um in terms of actually doing the reporting it's done online I'm going to go ahead and share my screen again um so that um and I'm going to show I'm going to go through um how you actually file so here's the um the the web page that you go to um in order to actually do the reporting so I I've I've I've done this for a couple of entities already um in

[34:44] which I'm involved and and and it's it's not complicated it does take some time and you have to have certain documents to do it okay so I don't know that you necessarily need to pay someone to do this although I imagine there's going to you know people are going to offer to do this for you for you know whatever $200 $500 whatever it is you know you'll make a decision whether you want to pay somebody to do it now the first thing you're going to see is there's a warning you're entering a US Government information system and you know by accessing it you're consenting to being monitored by the US government Etc if you s if you if you click cancel you're

[35:19] not going to get in so you click agree all right so here you see the beneficial ownership information report the boir and you see that anything with an asterisk is required okay so first of all here here's they have a a need help function here's their standard privacy and paperwork reduction act notes okay that's whatever that's fine all right so first of all um is this um a uh you know what type of filing is this so is this is it an initial report is it the first time you filed is it to correct a prior

[35:56] report you made made a mistake or is it to update a prior report now the difference between a correction and an update is in a correction you made a mistake in an update something has changed since your prior report so you see we need to keep these up to date and are you now a newly exempt entity and so basically um one would imagine that if you're a newly exempt empted entity uh let's say that you've become a large um I figure what the term is but a large company so now you're exempt and so you can amend your filing presumably to

[36:31] remove it okay so let's say we're doing an initial report okay the date prepared is automatically filled in it's the it's February 14th okay let's go to next okay um so um what you're doing um in most cases is you're requesting to receive a finsen ID meaning you're to be identified in in the database now here you can always look here and see see what this is um check this box to receive a finsen identifier for the reporting company it'll be provided um in the submission confirmation details

[37:06] okay and that finsen identifier is what um confirms that in fact you've complied okay now if you're a a a foreign pooled investment vehicle it's it's a different issue most of us are not going to be dealing with that so we're going to request to receive a fincent ID if if you want okay you notice it's not asterisk so you could also just leave it out okay um reporting company names I'm I'm just going to make up a name because I'm not actually going to file this I'm just going to take you through the steps so um let's just call this sample company oops hopefully we'll

[37:43] spell it right you know Corporation okay um alternative name if there's a DBA so you put those in there okay if there's more than one you can add alternative names okay your tax identific ification number so it's either going to be an employer identification number or a social security number basically unless it's some sort of foreign entity okay so let's say it's an EIN okay and um you know they used to be called 95 num so we'll give it 95 Dash um 98 7654 uh three I think is is the right

[38:19] number of numbers oops must be exactly nine characters one two three four five six seven eight nine oh okay I got take the dash out I guess there you go okay country jurisdiction only if it's a foreign tax ID okay so you don't need to worry about that okay country jurisdiction of formation okay so you know we're in the United States notice here's here's all the countries of the world but of course we're generally looking at the United States okay domestic reporting company okay so what in what state um was it Formed okay so um we'll say oops not not that we'll say

[38:56] California okay now it's you know 10A is asteris in Red so you have to put that it would appear you don't have to put the state of formation in don't know that it matters um at this point okay and what's your current address so for now I'm just going to put in you know address whatever your address would be but that you see that is required oops and my spelling is off again okay City I'm just going to put in here City okay US Territory or state so you know oops uh I'm sorry country us and then and and

[39:33] then if it is in the United States so what state is it in uh California ZIP code 9000000 for now that's fine okay let's hopefully it's not going to go this is wrong okay good so it's letting it go through um again I'm not going to file this so doesn't matter okay um uh check if it's an existing reporting company as of January 1st 2024 in other words it was formed sometime prior to that so in this case let's say that it

[40:10] was okay oh sorry sorry sorry sorry sorry this is not an existing reporting company sorry about that um that means um they've already reported okay so company applicant information okay now if you if you already have a finsen ID you can put that in okay but but if you don't you you can see it's not required okay so don't worry about that okay individual's name so I'll just put in my name Kevin beml you all know me okay middle name you don't have to put in suffix you don't have to put in you do have to put

[40:45] in birth date um I'm not going to give you my birth date uh my real birth date I'm just going to put uh 11 oops oops I'm sorry uh 11 uh 2011 no that won't work they may not take that so we'll say uh 19 33 okay there all right so that's not my real birth date so you know you're not getting any personal information okay uh address type so let's say you

[41:21] have a business address okay and it's very likely you know the the same address that you know you were before so address City oops okay country United States state California 90000 just like before okay then form of identification and issuing jurisdiction so you're going to have to upload an image of the I of your ID so

[41:57] in this case let let's say it's a state issued driver's license okay and you put your identifying document number so again this is not my real driver's license [Music] okay okay so that would that there you go okay identifying docum uh identifying document issuing jurisdiction okay United States okay state California okay you don't have to worry about tribal okay and then you we you you'll need to um put an image of it

[42:33] in there so I'm just gonna drag something let's see what do I have that I can put in there uhh do I have anything I should have had something ready [Music] um uh let's see okay I'm just going to try putting a picture in there and see what happens okay so there it's I just I just put I mean I put a JPEG of a of a house

[43:10] basically it's the same one that's behind me um I just want to be able to do that so I'll be able to click through to the next stage okay but but you would obviously you'd put um an image of in this case your State issue driver's license um or if you're using a p passport your passport your state local tribe ID okay whatever whatever you're using okay next all right beneficial owner um information all right so these are the people who have at least a 25% ownership in the entity okay so uh

[43:47] here's beneficial owner number one is it a parent parent Guardian information of a minor child no okay um in most cases say that's not going to be the case does the that person have a finen ID um I mean even if they do you see it's not uh red starts you don't have to put it in there okay is is the uh beneficial owner and exempt entity again that's something for you to work out with your advisors okay so um here's here you can see you have the um uh the red asteris so you

[44:22] need to fill this in so individual's last name theml first name Kevin okay birthday let's see I think I said 1 1 1933 okay all right and then residential address so in other words where can you where can you the owner be found or or the reporting person be found City jurisdiction United States state California and zip code okay and uh form of identific ific ation and issuing jurisdiction okay so again state

[44:59] driver's license um I forget what I put last time I think I put K okay uh country of jurisdiction United States um state if you want or state I mean need to put the state in okay and again um oops there we go okay and you need to upload a copy of your ID okay and now then you click next okay and before you submit it and I'm not going to submit this but um before you submit it you need to put in

[45:35] your email address confirm your email address put in your first and last name you click that you are you know that you agree I certify I am an I am authorized to file this boir on behalf of the reporting entity I further certify on behalf of the reporting company that the information contained in this boir is true correct and complete okay all right so you'll click click that and then you will click I am human right so it knows you're human and then the this um um um this submit Bo Boi button will populate

[46:12] and you will be able to submit your report okay again I'm not going to do that because I don't want to you know gum up the um you know the the uh database but that's that's all you need to so you you can see we we work through it in what I think it was about 10 minutes it might take you a little bit longer because you have to you know take a picture of your driver's license or whatever so I'm going to go ahead and stop sharing and go back to the presentation so this um link will be in the show notes and um and and if you are uh a reporting company so then if you

[46:47] choose to you can um file you can uh do the reporting yourself okay so next now let's talk about failure to report okay now I didn't see anything about forgetting to report or not understanding how to report okay so I don't know what's going to happen in those circumstances however willful failure to report complete or updated beneficial owner information to finsen or the

[47:23] willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in civil or criminal penalties I'm reading this to give it the impact including civil penalties of up to $500 for each day okay per day that's $3500 a week that's $115,000 a month on average okay that the violation continues

[47:58] or criminal penalties including imprisonment for up to 2 years and or a fine of up to $10,000 okay and Senior officers of an entity that fails to file um may be held accountable for that failure so it's not like they're gonna you know you can't put a corporation in into prison right it's the officers that that will get tagged for that okay and and and I don't think you know as as the officer of a company you're going to be able to say well my lawyer should have done it I don't think that's going to work okay um

[48:34] and by the way you know if if your attitude is I don't want the government to have this information so I'm not going to file um I'm not a lawyer so I'm not giving you legal advice but to me that sounds like willful failure to file okay because you know you need to file and you're choosing not to okay and you and you don't and you're you're basing it on your you know not wanting to file as opposed to your belief that you're exempt now what would be the penalty for not filing if you believe you're exempt

[49:10] and it turns out you're not exempt don't know yet okay don't know yet so these are all unanswered questions and um you know hang on because it's it's it's it's going to be a ride right all this all these new regulatory schemes turn out that way okay so last thing there is a small entity compliance guide which is sort of funny because it's basically only small entities that need to comply I I put the URL here I'm not you can screenshot it if you want but it's also in the show notes uh it's going to be in the show notes so um if you're watching this live

[49:47] just give me uh you know 20 30 minutes after the after the show is done and and this link will be in the show notes and you can download loaded it's it's a PDF and um uh let me actually let me see if I can let me try this okay nope it's not gonna let me do that yeah window share yeah it won't un for some reason oh here we go finder okay that's that's what let me see share my find NOP yeah for some reason it won't let me share my finder I

[50:22] I wanted to show you a copy of um of what the um this Boi uh small entity compliance guide looks like but it's it's really nice because excuse me you as you go through it it asks you certain questions that you can answer and I I think the intent is on your own determine whether you're required to file now you know whether you want to trust um finen to properly guide you to a decision about whether you need to file or not that's up to you

[50:59] um my my you know my information my advice stands if if you're not sure whether you need to file you have any questions talk to your lawyer talk to your accountant before you file to make sure that you're doing the right thing okay there's nothing like individual advice um to make sure that you're you know properly in compliance right so um uh but but but you know in terms of questions that you may have to make a meeting with your lawyer or accountant more efficient it's certainly worth your

[51:36] time to read this and and and understand what questions there may be about your situation before you meet with um your advisers okay all right I think that's what we got here yeah so um these uh these links will also be in the show notes so if you have any questions you can email me okay as you know I'm not a lawyer I'm not an accountant I'm a professional fiduciary and and a business adviser and that's why I bring this up it's in really in my capacity as a business advisor to um you know help you avoid problems down the road but

[52:12] feel free to email you um if if if you're asking me a question that I don't think I'm qualified to answer so I I'll I'll let you know that and if and if and I'll be happy to find you someone who I think is qualified to answer if if you don't have an adviser that you can turn to um and and and and if you have a general question uh feel free to post it on our social media um because uh other people can then benefit to uh whatever response I give or if it's again something I'm not qualified to respond

[52:48] to um I will see if I can get someone who is to uh answer that question then either have that person post his response or I will on the person's behalf okay so you know again I want to emphasize a couple of things well actually let me just we got the legal stuff here okay there's the legal stuff all right so let let's take this down and go back so I I want to just in closing I want to emphasize a couple of things number one this is brand new um the reason I know about it was I I was doing an annual report on an entity

[53:26] and on the Secretary of State's website for I think it was Arkansas there was a notation that said okay you've you know you've you've given us our annual report make sure you deal with boir I'm like I had no idea what boir was before I saw that and so that but you know being advised to comply and I you know I think well actually I'm not going to say that because I don't remember now but anyway being advised to comply I looked into it found out about it you know read information about this the CTA the corporate transparency act and and you

[54:02] know read information like I showed you before on on the boir um so that I I would be you know I I I could properly um advise people about what they may need to do notice I stress may need to do not have to do I I can't tell you whether you need to comply with this or not I don't know what you're your individual entity is uh don't know whether you're you know an exempt um entity or exe you know whether you're reporting company all of that needs to be determined so um what I do

[54:38] want to do is make sure that you don't get caught up um you know when you think about it if you don't file your tax return what happens well if it's willful it's bad right um but even when it's not willful there are penalties for not filing and I imagine that that it'll be the same thing with the boir even though I I couldn't find penalties specified for non-willful failure to file um one would imagine at some point there's going to be some sort of punitive action taken so um you know is this rule going

[55:14] to survive um one would imagine so um evidently you know more you know 2third of our legislator leg just lay tours believe that it's important so I don't know is is is the makeup of Congress going to change you know so much after the election later this year that the law would be repealed that doesn't appear to me to be the way things generally work once one of these laws is enacted it seems like it stays in place so um I I think it's something you know we as small business people are just

[55:50] going to have to deal with and and whether whether we like it or not how you deal with it of course again emphasizing that that's that's a decision for you to make so um that wraps things up for today and I thank you very much for watching I hope you found this useful um would love to hear your comments about it um if there if there's something else that um I could have done to make it more useful by all means let me know um you know feel free to post a comment I mentioned before and

[56:26] if you have questions that you think I might be able to help you with by all means let me know so that wraps it up not only for today but for the week and so um next week on Monday at 10: am is the next edition of trust and Estates weekly um my guest is going to be um Michael Reynolds Michael is a an appraiser and he's going to talk about appraisal issues related to trusts and estate dates okay on Tuesday is the next edition of business lessons from the military and then a week from today will

[57:02] be the next episode of people making money so once again thanking you for joining me not only today but but all of this week uh really appreciate your viewership wishing you a terrific rest of the day and a wonderful rest of the week and signing off B uh Marie I've done that twice in a row now Marie darling You Are are my bell all the best