November 22, 2024 • 15 mins
In this critical episode of Paid to Create, Sarah teams up with corporate attorney Grant Teeple to deliver an urgent message for business owners everywhere: the Corporate Transparency Act of 2024 is here, and ignoring it could land you in serious trouble. With fines of $500 a day and potential jail time for non-compliance, this isn’t a law you can afford to overlook.
Grant explains who’s on the hook—spoiler alert: it’s not just Wall Street—and what steps you need to take to stay compliant. From reporting requirements to privacy concerns, you’ll get a clear roadmap to protect your business and avoid the severe penalties that come with violations.
If you’re an entrepreneur, small business owner, or decision-maker, this is your wake-up call. Tune in now to find out how to navigate this game-changing law before it’s too late.
Listen or watch all episodes of Paid to Create at paidtocreatepodcast.com
Learn more about CTA Portal at ctaportal.us
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hi there and welcome to today's episode of Pay2Create
.
I'm Sarah Jenkins and I'msitting here with my attorney
and friend, grant Teeple.
Speaker 2 (00:07):
Good morning.
How are you, Sarah?
Speaker 1 (00:09):
I'm great this is a PSA public service announcement
because we can go over somespecial things that I learned
about for your company and yourbusiness.
That, frankly, shocked me, andthe whole goal of having a good
corporate attorney is to makesure that your ass is kept out
of jail.
Mine so far has been he keepstrack of it all the time, all
(00:30):
those decisions.
There's a couple of things inparticular that I wanted to ask
you and you're a professional atanyway, this is what you do all
the time but the specifics thatI think might help someone that
listens to these kind ofpodcasts is to get these details
down, if that's okay.
Speaker 2 (00:40):
Absolutely.
How can I help All?
Speaker 1 (00:42):
right.
Give us a scoop.
What is this CorporateTransparency Act and why should
our audience of small businessowners even care?
Speaker 2 (01:06):
Well, they should care, because if they violate
this act, the CorporateTransparency Act, they can go to
jail for up to two years andhave a $500 a day penalty, just
because they own an entity andthey don't provide certain
information about that entity tothe US government.
So for each corporation or LLCthat you may own, for each one,
even if one owns another foreach one of those you have to
provide certain information tothe federal government by the
end of this year or else you'resubject to that $500 a day fine
and the potential criminalpenalty.
Speaker 1 (01:26):
That thing we talked about.
Let's not.
Let's not go to jail, let's notgo to jail, let's not.
Do it Right on.
That's super, super important.
Who's on the hook for this?
Is it just for Wall Street bigshots, or do the mom and pop
shops need to pay attention tothis particular rule as well?
Speaker 2 (01:48):
Yeah, the answer is both, and in fact, it's not only
the owners of companies thatare on the hook for it, but it's
people that work in thecompanies that are on the hook.
What, yeah, that's right.
So if you're a controlledperson, if you're a CEO, a COO,
a senior decision maker in thecompany that you affect the
material activities of thebusiness on a day-to-day basis,
you have to have yourinformation up there.
So let me set the stage If youown more than 25% of the company
or your senior management, thecompany has the obligation to
(02:12):
make sure that your personalinformation goes up onto the
government database.
That means their name, theiraddress, their date of birth,
and we also need to have acurrent picture of either your
passport or your driver'slicense, and they have to be
active and in good standing.
So that means they're alsogoing to have your hair color
and your eye color and all theother information that's on
(02:35):
those pieces of identifyingdocuments like the driver's
license or the passport, and youhave to keep that information
current.
And so it's a big job, becausemany companies may have 5, 10,
15 reporting people that theyhave to keep the information up
and current on.
Speaker 1 (02:52):
Who decides which people in the company to be up
on there?
Speaker 2 (02:55):
So the rule is there's two tests.
The one test is super easy ifyou own 25% or more of the
company.
The other test and maybe Ishouldn't say it's super easy,
because what if you own 25% ormore of the company?
The other, and maybe Ishouldn't say it's super easy,
because what if you have acompany that has 10 owners that
own all 10%?
Speaker 1 (03:09):
Or, like you said, that company that owns another
company.
Now you have to think all thatstuff through.
Speaker 2 (03:13):
That's right, and this applies to trusts,
partnerships, all these types ofentities.
And so the ownership the 25%threshold, that's fairly easy.
Everybody generally knows ifthey own 25% threshold.
That's fairly easy, everybodygenerally knows if they own 25%
or more.
The next test is do you have amaterial effect on the
day-to-day operations of thecompany?
Again, that's like a president,a CEO, a COO, sometimes your
(03:38):
CTO, your chief technicalofficer, maybe a software
company, or you're even perhapsa human resources person.
So if you meet either of thosetests, we need all that personal
information to be put up on thegovernment database and kept
current.
Speaker 1 (03:49):
Luckily, I don't have to figure that stuff out.
I will just ask you who in mycompany needs to be on the
report, and then you can do thatfor me too.
Sure, I love that part.
Speaker 2 (03:57):
We are doing that for you.
Speaker 1 (03:58):
My favorite part of the business ownership when you
do that job.
And then let's talk aboutbeneficial owners.
That sounds fancy, but whatdoes it mean in plain English
and why does Uncle Sam need toknow?
Speaker 2 (04:15):
Yeah, so beneficial owner B-O-I the beneficial owner
information is really that thegovernment put the statute in
place to try to attack moneylaundering and people who are
running companiessurreptitiously, even though
they might not be listed on thecompany.
So they're trying to get behindthe veil of who are the secret
black.
You know black black operationsowners.
And the test again forbeneficial owner is 25% or more
(04:37):
or the control.
And that's funny.
You may not actually own any ofthe company but they treat you
as a beneficial owner if you'reone of these control people.
So the government says all ofthese people are the beneficial
owners.
And just to be clear, this lawis being enforced by FinCEN,
which is the Financial CrimesInformation Network.
And yeah, that's the federalgovernment and violating their
(04:59):
laws is a federal felony, it's afederal offense.
It's a pretty severe sanction.
The government is basically nowweaponized your bankers, your
lawyers and your CPAs againstyou to get all this personal
information into the governmentdatabase and they swear they'll
keep it secret.
But I don't think anyonebelieves them.
Speaker 1 (05:18):
No, it's not a secret If you're telling the
government and you have toreport it by a certain date or
else that doesn't seem like asecret to me.
Speaker 2 (05:23):
They say they're going to keep the fact you have
to report.
It's not the secret.
They say, once theinformation's up there, they
won't tell anyone your personalinformation.
And you know, if you believethe government then I'm sure
that'll all work out just fine.
Speaker 1 (05:35):
Fuck.
Speaker 2 (05:36):
So for you know hacks like the FAA, hack that
information out to the worldalready.
Speaker 1 (05:46):
Things never happen.
Nothing stays secret in thisworld, is my experience.
Just curious, why wouldsomebody not want to report that
?
Or why is their company?
Is that these things are asecret?
Like, what's the point of asecret in that realm?
Speaker 2 (05:56):
You know, I think the concern for the company is if
you got 5, 10, 15 people youhave to report.
Now you have all this personalsensitive information.
You know identity theft is ahuge problem, I see.
So now the company's got tocollect all this personal
information, which an identitythief would love to have access
to a database of the richest andmost talented people in your
(06:20):
company Business owners Becausethey're owners and these are the
people who are going to havemoney and that's who you want to
steal the identity of.
So it's a very sensitive thingfor the company to collect all
this information.
What company has copies oftheir employees' passports and
driver's license?
The answer is none, but nowyou're going to have one.
Speaker 1 (06:39):
We actually had a couple of those collected when
we did the work from homestarting 2014,.
Because there's another weirdlaw about you have to make sure
the person you're hiring is theperson they say they are.
I was like, okay, that makessense.
So we've had a couple passports, but not many.
This sounds like another box tocheck for already very busy
(07:00):
business owners.
How big of a headache is thiscompliance really and how could
we make this easier for thebusiness owner?
Speaker 2 (07:07):
Well it is.
It is a headache because againyou have to go to your employees
and ask them please give me acopy of your driver's license,
please tell me your date ofbirth, and you have to have all
that personal information youknow organized, and making sure
this is the key.
Once you upload all thatinformation let's say you have
10 people in your company,you've uploaded that information
.
If any of them move and get anew address, or if their
(07:30):
driver's license expires ortheir passport expires, you have
to update it, and so thecompany has to be vigilant to
make sure that their reportingpersons in their company have a
current driver's license orpassport.
If you don't keep it currentwithin 30 days, you're back to
being in violation, you're backto the $500 a day penalty and
(07:51):
you're back up to the two yearsin jail.
And here's the challenge.
If a company goes to be one ofthe challenges, let's say you're
a company and you don't comply,you decide I'm not going to
comply, and then someday youwant to sell your company and
(08:16):
you don't comply.
You decide I'm not going tocomply, and then someday you
want to sell your company.
Well, anything, any good lawyerwhen we do the due diligence on
that acquisitions now on ourdue diligence questionnaire is
questions designed to see ifyou're been complying with the
corporate transparency act, ortwo.
$500 a day times 365 days in ayear is a whole heck of a lot of
money, right?
You're talking what?
150 grand a year and times acouple of years Now you've got
when we go to buy your companyor when you go to sell it.
If you haven't been compliantnow, I've got to reserve that
money and set it aside until thestatute of limitations runs on
(08:39):
that or until you go comply.
So it is a big pain in the assand it is a it is one that has
serious financial ramificationsif you don't stay current with
it.
Speaker 1 (08:50):
Good thing it's not my job.
Yeah, for the procrastinatorsout there, you know who you are.
What happens if you do missthat deadline or you mess up,
you forget?
Speaker 2 (09:02):
Yeah, Nobody really knows, because the first
enforcement of this law is goingto happen after the first of
this year and you can betthey're going to make example of
as many people as they can tocreate a sense of urgency for
people to do it, Because so farthe evidence is people aren't
really complying as quickly asthey need to.
Most companies haven't compliedas of right now, but it does
(09:25):
appear to me.
My view is, if you miss thedeadline but then you come
compliant, you're probably goingto be okay.
I doubt they're going to goback and say, hey, you weren't
compliant for two or threemonths and now we're going to
ding you for the fine.
I think they're going to behappy that you're compliant, but
you can bet they're going totry to make an example of
somebody out there andsomebody's going to pay a big
(09:46):
bill for not being compliant.
Speaker 1 (09:48):
I don't know, though the statement of information.
You miss that deadline, you getthe fine.
It's $1,000.
Speaker 2 (09:53):
Yeah, so that's on the state level and I agree,
especially the state ofCalifornia.
They're very good about doingthat, fine, and if the federal
government is as strict as thestate of California, this is a
super serious event to miss andto not be in compliance on.
Speaker 1 (10:13):
That's kind of what I was feeling about the
strictness of these penaltiesover your head.
Some people are going to freakout about that.
Privacy, like you know, doesthis mean the government is
peeking into their business,such as you know where they live
, you know where their child issleeping and breathing in
whatever at night or in yourunderwear drawer.
What else do they want to know?
Speaker 2 (10:29):
Yeah, and the privacy is a big concern.
That's why one of the solutionsthat's out there to do this is
if you go to CTA portal likecharlietomalphaportalus
ctaportalus it's a portal that'srun by my law firm and the
value of that is that not onlydo we organize the information
(10:52):
for you, we upload it to thegovernment.
You'll have an audit trail soyou can see what you've uploaded
and when, and anything that yousend us, because it's run by
the law firm, has theattorney-client privilege, so
you can assure your people inyour organization, whose
information you're collecting,that it's going to be protected
by the attorney-client privilegebefore it goes up to the
(11:13):
government database.
Speaker 1 (11:14):
That's a huge perk.
I like that one a lot.
What is one simple thing everybusiness owner listening today
should do right now to get onthe right side of that law.
Just that website.
Speaker 2 (11:26):
I think that'd be my answer.
I think I would go toctaportalus and I would get
everybody's information that Ineed to up on that website and
then have that automaticallyuploaded to the government the
government, because one of theother values of the website is,
(11:47):
let's say, you have 10 peoplethat are reporting and
somebody's driver's licenseexpires.
Well, our database monitors allthe dates of those IDs and
we'll send a notice out to yousaying hey, did you know your
CEO's driver's license isexpiring in 30 days.
Go out and get a new one.
Let's get that information.
It will prompt youaffirmatively to keep you
current on a going forward basis, so you don't wake up later
finding someone hadn't expiredan ID and now you've been
(12:11):
non-compliant and you didn'tknow it.
So this kind of watches out foryou and provides notices.
So I do think it's just assimple as going to ctaportalus
and clicking through the easysteps, filling out the
information and getting it up onthat website database.
Speaker 1 (12:28):
So when you have to keep the information current, I
didn't even understand that Ineeded to know exactly where my
directors, or whatever, lived.
Like they're residents orwhatever.
Like I don't, I don't get that.
Speaker 2 (12:40):
Well, you know, at least for the purposes of this.
Now, if it's a control person,you do need to know that and you
need to make sure that's up onthe database that's kept current
.
If somebody moves, you have totell your employees, or at least
the ones that are reporting, tomake sure to notify you when
they move so that you can keepthat database current.
If you don't do that within 30days, $500 a day, fine, two
(13:02):
years in jail maybe.
Speaker 1 (13:04):
I'll take the fine, please, but neither.
Speaker 2 (13:07):
I'll take the fine or neither also.
Speaker 1 (13:09):
Okay, and is this act just the tip of the iceberg for
transparency laws?
Or, once we're compliant, canwe just sort of relax?
Speaker 2 (13:17):
Well, that's a big philosophical question.
You know, we've seen the FourthAmendment slowly eroded, one
little baby step out of timeover time.
You know the government, if youremember the NSA, the National
Security Agency, and all thosescams where they knew everything
about us and they allegedlystopped doing it.
But I think, at least on thebusiness side, that's probably
(13:38):
the tip of the iceberg.
It is only this, seems to me.
All the regulations only tendto require less and less privacy
for you and more and moreinvasion by the businesses.
I will tell you that thisstandard of having this
beneficial owner information fora company is actually a world
standard.
The US is a little slow to thegame here.
All of my international clients, we've been having the it's not
(14:01):
called the CorporateTransparency Act over in Europe,
but we've been having the sameexperience over there.
Anytime we do any kind ofbanking or have any entity set
up, all this information isrequired.
It really is kind of a worldstandard that the US has finally
adopted.
Speaker 1 (14:16):
I mean we're always late to the party.
Speaker 2 (14:18):
Yeah, that's right.
Speaker 1 (14:21):
Is there anything else that we're missing you just
want to touch on?
I mean, I guess go tell allyour employees that have control
and interest to let you knowwhen they move if they move.
Yeah.
And then, oh, I have a weirdone.
What if you don't have apassport and you lose your
license?
Speaker 2 (14:38):
Yeah For some reason it happens.
Yeah, they'll have to go outliterally to be in compliance.
They're going to have to go outand get a license or a passport
for you.
There is no feature in thegovernment database that allows
you not to include thatinformation.
There's no excuse.
There's no exception.
Speaker 1 (14:56):
You don't have a driver's license.
What if you never drove?
Speaker 2 (14:58):
You know, if you don't have a driver's license,
you Well, it doesn't have adriver's license.
What if you never drove?
You know, if you don't have adriver's license, you never
applied for a passport I wouldwonder if you're really going to
be a CEO.
Probably not, probably not.
But if you're not, you may makenew law in the United States.
There may be an exception forthat.
As a matter of fact, just as anaside, there's been a few
courts here in the US federalcourts who have had before them
the legitimacy of the CTACorporate Transparency Act, and
(15:22):
a lot of people are trying tohave it struck down because it's
too invasive and too burdensomeon the businesses.
But so far none of thoseactions have been successful and
I suspect, because it is theworld standard, that, whether
it's this act or affixed to it,this is here to stay.
Very weird it is.
Thanks for having me.
Speaker 1 (15:43):
Man, thank you for your time.
Thank you for the information.
I think it's incrediblyimportant and I have a couple of
brothers with businesses tocall right after this.
Speaker 2 (15:48):
All right, sounds good.
We'll see you on ctaportalus.
Thank you.
Hi there and welcome to today's episode of Pay2Create
.
I'm Sarah Jenkins and I'msitting here with my attorney
and friend, grant Teeple.
Speaker 2 (00:07):
Good morning.
How are you, Sarah?
Speaker 1 (00:09):
I'm great this is a PSA public service announcement
because we can go over somespecial things that I learned
about for your company and yourbusiness.
That, frankly, shocked me, andthe whole goal of having a good
corporate attorney is to makesure that your ass is kept out
of jail.
Mine so far has been he keepstrack of it all the time, all
(00:30):
those decisions.
There's a couple of things inparticular that I wanted to ask
you and you're a professional atanyway, this is what you do all
the time but the specifics thatI think might help someone that
listens to these kind ofpodcasts is to get these details
down, if that's okay.
Speaker 2 (00:40):
Absolutely.
How can I help All?
Speaker 1 (00:42):
right.
Give us a scoop.
What is this CorporateTransparency Act and why should
our audience of small businessowners even care?
Speaker 2 (01:06):
Well, they should care, because if they violate
this act, the CorporateTransparency Act, they can go to
jail for up to two years andhave a $500 a day penalty, just
because they own an entity andthey don't provide certain
information about that entity tothe US government.
So for each corporation or LLCthat you may own, for each one,
even if one owns another foreach one of those you have to
provide certain information tothe federal government by the
end of this year or else you'resubject to that $500 a day fine
and the potential criminalpenalty.
Speaker 1 (01:26):
That thing we talked about.
Let's not.
Let's not go to jail, let's notgo to jail, let's not.
Do it Right on.
That's super, super important.
Who's on the hook for this?
Is it just for Wall Street bigshots, or do the mom and pop
shops need to pay attention tothis particular rule as well?
Speaker 2 (01:48):
Yeah, the answer is both, and in fact, it's not only
the owners of companies thatare on the hook for it, but it's
people that work in thecompanies that are on the hook.
What, yeah, that's right.
So if you're a controlledperson, if you're a CEO, a COO,
a senior decision maker in thecompany that you affect the
material activities of thebusiness on a day-to-day basis,
you have to have yourinformation up there.
So let me set the stage If youown more than 25% of the company
or your senior management, thecompany has the obligation to
(02:12):
make sure that your personalinformation goes up onto the
government database.
That means their name, theiraddress, their date of birth,
and we also need to have acurrent picture of either your
passport or your driver'slicense, and they have to be
active and in good standing.
So that means they're alsogoing to have your hair color
and your eye color and all theother information that's on
(02:35):
those pieces of identifyingdocuments like the driver's
license or the passport, and youhave to keep that information
current.
And so it's a big job, becausemany companies may have 5, 10,
15 reporting people that theyhave to keep the information up
and current on.
Speaker 1 (02:52):
Who decides which people in the company to be up
on there?
Speaker 2 (02:55):
So the rule is there's two tests.
The one test is super easy ifyou own 25% or more of the
company.
The other test and maybe Ishouldn't say it's super easy,
because what if you own 25% ormore of the company?
The other, and maybe Ishouldn't say it's super easy,
because what if you have acompany that has 10 owners that
own all 10%?
Speaker 1 (03:09):
Or, like you said, that company that owns another
company.
Now you have to think all thatstuff through.
Speaker 2 (03:13):
That's right, and this applies to trusts,
partnerships, all these types ofentities.
And so the ownership the 25%threshold, that's fairly easy.
Everybody generally knows ifthey own 25% threshold.
That's fairly easy, everybodygenerally knows if they own 25%
or more.
The next test is do you have amaterial effect on the
day-to-day operations of thecompany?
Again, that's like a president,a CEO, a COO, sometimes your
(03:38):
CTO, your chief technicalofficer, maybe a software
company, or you're even perhapsa human resources person.
So if you meet either of thosetests, we need all that personal
information to be put up on thegovernment database and kept
current.
Speaker 1 (03:49):
Luckily, I don't have to figure that stuff out.
I will just ask you who in mycompany needs to be on the
report, and then you can do thatfor me too.
Sure, I love that part.
Speaker 2 (03:57):
We are doing that for you.
Speaker 1 (03:58):
My favorite part of the business ownership when you
do that job.
And then let's talk aboutbeneficial owners.
That sounds fancy, but whatdoes it mean in plain English
and why does Uncle Sam need toknow?
Speaker 2 (04:15):
Yeah, so beneficial owner B-O-I the beneficial owner
information is really that thegovernment put the statute in
place to try to attack moneylaundering and people who are
running companiessurreptitiously, even though
they might not be listed on thecompany.
So they're trying to get behindthe veil of who are the secret
black.
You know black black operationsowners.
And the test again forbeneficial owner is 25% or more
(04:37):
or the control.
And that's funny.
You may not actually own any ofthe company but they treat you
as a beneficial owner if you'reone of these control people.
So the government says all ofthese people are the beneficial
owners.
And just to be clear, this lawis being enforced by FinCEN,
which is the Financial CrimesInformation Network.
And yeah, that's the federalgovernment and violating their
(04:59):
laws is a federal felony, it's afederal offense.
It's a pretty severe sanction.
The government is basically nowweaponized your bankers, your
lawyers and your CPAs againstyou to get all this personal
information into the governmentdatabase and they swear they'll
keep it secret.
But I don't think anyonebelieves them.
Speaker 1 (05:18):
No, it's not a secret If you're telling the
government and you have toreport it by a certain date or
else that doesn't seem like asecret to me.
Speaker 2 (05:23):
They say they're going to keep the fact you have
to report.
It's not the secret.
They say, once theinformation's up there, they
won't tell anyone your personalinformation.
And you know, if you believethe government then I'm sure
that'll all work out just fine.
Speaker 1 (05:35):
Fuck.
Speaker 2 (05:36):
So for you know hacks like the FAA, hack that
information out to the worldalready.
Speaker 1 (05:46):
Things never happen.
Nothing stays secret in thisworld, is my experience.
Just curious, why wouldsomebody not want to report that
?
Or why is their company?
Is that these things are asecret?
Like, what's the point of asecret in that realm?
Speaker 2 (05:56):
You know, I think the concern for the company is if
you got 5, 10, 15 people youhave to report.
Now you have all this personalsensitive information.
You know identity theft is ahuge problem, I see.
So now the company's got tocollect all this personal
information, which an identitythief would love to have access
to a database of the richest andmost talented people in your
(06:20):
company Business owners Becausethey're owners and these are the
people who are going to havemoney and that's who you want to
steal the identity of.
So it's a very sensitive thingfor the company to collect all
this information.
What company has copies oftheir employees' passports and
driver's license?
The answer is none, but nowyou're going to have one.
Speaker 1 (06:39):
We actually had a couple of those collected when
we did the work from homestarting 2014,.
Because there's another weirdlaw about you have to make sure
the person you're hiring is theperson they say they are.
I was like, okay, that makessense.
So we've had a couple passports, but not many.
This sounds like another box tocheck for already very busy
(07:00):
business owners.
How big of a headache is thiscompliance really and how could
we make this easier for thebusiness owner?
Speaker 2 (07:07):
Well it is.
It is a headache because againyou have to go to your employees
and ask them please give me acopy of your driver's license,
please tell me your date ofbirth, and you have to have all
that personal information youknow organized, and making sure
this is the key.
Once you upload all thatinformation let's say you have
10 people in your company,you've uploaded that information
.
If any of them move and get anew address, or if their
(07:30):
driver's license expires ortheir passport expires, you have
to update it, and so thecompany has to be vigilant to
make sure that their reportingpersons in their company have a
current driver's license orpassport.
If you don't keep it currentwithin 30 days, you're back to
being in violation, you're backto the $500 a day penalty and
(07:51):
you're back up to the two yearsin jail.
And here's the challenge.
If a company goes to be one ofthe challenges, let's say you're
a company and you don't comply,you decide I'm not going to
comply, and then someday youwant to sell your company and
(08:16):
you don't comply.
You decide I'm not going tocomply, and then someday you
want to sell your company.
Well, anything, any good lawyerwhen we do the due diligence on
that acquisitions now on ourdue diligence questionnaire is
questions designed to see ifyou're been complying with the
corporate transparency act, ortwo.
$500 a day times 365 days in ayear is a whole heck of a lot of
money, right?
You're talking what?
150 grand a year and times acouple of years Now you've got
when we go to buy your companyor when you go to sell it.
If you haven't been compliantnow, I've got to reserve that
money and set it aside until thestatute of limitations runs on
(08:39):
that or until you go comply.
So it is a big pain in the assand it is a it is one that has
serious financial ramificationsif you don't stay current with
it.
Speaker 1 (08:50):
Good thing it's not my job.
Yeah, for the procrastinatorsout there, you know who you are.
What happens if you do missthat deadline or you mess up,
you forget?
Speaker 2 (09:02):
Yeah, Nobody really knows, because the first
enforcement of this law is goingto happen after the first of
this year and you can betthey're going to make example of
as many people as they can tocreate a sense of urgency for
people to do it, Because so farthe evidence is people aren't
really complying as quickly asthey need to.
Most companies haven't compliedas of right now, but it does
(09:25):
appear to me.
My view is, if you miss thedeadline but then you come
compliant, you're probably goingto be okay.
I doubt they're going to goback and say, hey, you weren't
compliant for two or threemonths and now we're going to
ding you for the fine.
I think they're going to behappy that you're compliant, but
you can bet they're going totry to make an example of
somebody out there andsomebody's going to pay a big
(09:46):
bill for not being compliant.
Speaker 1 (09:48):
I don't know, though the statement of information.
You miss that deadline, you getthe fine.
It's $1,000.
Speaker 2 (09:53):
Yeah, so that's on the state level and I agree,
especially the state ofCalifornia.
They're very good about doingthat, fine, and if the federal
government is as strict as thestate of California, this is a
super serious event to miss andto not be in compliance on.
Speaker 1 (10:13):
That's kind of what I was feeling about the
strictness of these penaltiesover your head.
Some people are going to freakout about that.
Privacy, like you know, doesthis mean the government is
peeking into their business,such as you know where they live
, you know where their child issleeping and breathing in
whatever at night or in yourunderwear drawer.
What else do they want to know?
Speaker 2 (10:29):
Yeah, and the privacy is a big concern.
That's why one of the solutionsthat's out there to do this is
if you go to CTA portal likecharlietomalphaportalus
ctaportalus it's a portal that'srun by my law firm and the
value of that is that not onlydo we organize the information
(10:52):
for you, we upload it to thegovernment.
You'll have an audit trail soyou can see what you've uploaded
and when, and anything that yousend us, because it's run by
the law firm, has theattorney-client privilege, so
you can assure your people inyour organization, whose
information you're collecting,that it's going to be protected
by the attorney-client privilegebefore it goes up to the
(11:13):
government database.
Speaker 1 (11:14):
That's a huge perk.
I like that one a lot.
What is one simple thing everybusiness owner listening today
should do right now to get onthe right side of that law.
Just that website.
Speaker 2 (11:26):
I think that'd be my answer.
I think I would go toctaportalus and I would get
everybody's information that Ineed to up on that website and
then have that automaticallyuploaded to the government the
government, because one of theother values of the website is,
(11:47):
let's say, you have 10 peoplethat are reporting and
somebody's driver's licenseexpires.
Well, our database monitors allthe dates of those IDs and
we'll send a notice out to yousaying hey, did you know your
CEO's driver's license isexpiring in 30 days.
Go out and get a new one.
Let's get that information.
It will prompt youaffirmatively to keep you
current on a going forward basis, so you don't wake up later
finding someone hadn't expiredan ID and now you've been
(12:11):
non-compliant and you didn'tknow it.
So this kind of watches out foryou and provides notices.
So I do think it's just assimple as going to ctaportalus
and clicking through the easysteps, filling out the
information and getting it up onthat website database.
Speaker 1 (12:28):
So when you have to keep the information current, I
didn't even understand that Ineeded to know exactly where my
directors, or whatever, lived.
Like they're residents orwhatever.
Like I don't, I don't get that.
Speaker 2 (12:40):
Well, you know, at least for the purposes of this.
Now, if it's a control person,you do need to know that and you
need to make sure that's up onthe database that's kept current
.
If somebody moves, you have totell your employees, or at least
the ones that are reporting, tomake sure to notify you when
they move so that you can keepthat database current.
If you don't do that within 30days, $500 a day, fine, two
(13:02):
years in jail maybe.
Speaker 1 (13:04):
I'll take the fine, please, but neither.
Speaker 2 (13:07):
I'll take the fine or neither also.
Speaker 1 (13:09):
Okay, and is this act just the tip of the iceberg for
transparency laws?
Or, once we're compliant, canwe just sort of relax?
Speaker 2 (13:17):
Well, that's a big philosophical question.
You know, we've seen the FourthAmendment slowly eroded, one
little baby step out of timeover time.
You know the government, if youremember the NSA, the National
Security Agency, and all thosescams where they knew everything
about us and they allegedlystopped doing it.
But I think, at least on thebusiness side, that's probably
(13:38):
the tip of the iceberg.
It is only this, seems to me.
All the regulations only tendto require less and less privacy
for you and more and moreinvasion by the businesses.
I will tell you that thisstandard of having this
beneficial owner information fora company is actually a world
standard.
The US is a little slow to thegame here.
All of my international clients, we've been having the it's not
(14:01):
called the CorporateTransparency Act over in Europe,
but we've been having the sameexperience over there.
Anytime we do any kind ofbanking or have any entity set
up, all this information isrequired.
It really is kind of a worldstandard that the US has finally
adopted.
Speaker 1 (14:16):
I mean we're always late to the party.
Speaker 2 (14:18):
Yeah, that's right.
Speaker 1 (14:21):
Is there anything else that we're missing you just
want to touch on?
I mean, I guess go tell allyour employees that have control
and interest to let you knowwhen they move if they move.
Yeah.
And then, oh, I have a weirdone.
What if you don't have apassport and you lose your
license?
Speaker 2 (14:38):
Yeah For some reason it happens.
Yeah, they'll have to go outliterally to be in compliance.
They're going to have to go outand get a license or a passport
for you.
There is no feature in thegovernment database that allows
you not to include thatinformation.
There's no excuse.
There's no exception.
Speaker 1 (14:56):
You don't have a driver's license.
What if you never drove?
Speaker 2 (14:58):
You know, if you don't have a driver's license,
you Well, it doesn't have adriver's license.
What if you never drove?
You know, if you don't have adriver's license, you never
applied for a passport I wouldwonder if you're really going to
be a CEO.
Probably not, probably not.
But if you're not, you may makenew law in the United States.
There may be an exception forthat.
As a matter of fact, just as anaside, there's been a few
courts here in the US federalcourts who have had before them
the legitimacy of the CTACorporate Transparency Act, and
(15:22):
a lot of people are trying tohave it struck down because it's
too invasive and too burdensomeon the businesses.
But so far none of thoseactions have been successful and
I suspect, because it is theworld standard, that, whether
it's this act or affixed to it,this is here to stay.
Very weird it is.
Thanks for having me.
Speaker 1 (15:43):
Man, thank you for your time.
Thank you for the information.
I think it's incrediblyimportant and I have a couple of
brothers with businesses tocall right after this.
Speaker 2 (15:48):
All right, sounds good.
We'll see you on ctaportalus.
Thank you.
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