The CORPORATE TRANSPARENCY ACT is less than a month away from going live and the wealth management industry doesn’t seem to be too worried about it. That worries me because it affects at least 32 million entities according to FinCen- including most small businesses in this country. States like New York may be enacting laws to mirror the disclosure requirements at the state level. Non-compliance is expensive and could lead to jail. How to manage these reporting responsibilities is going to be a big issue in the wealth space.

I covered the general framework in June with attorney Stephen Liss here: EPISODE 134.

Today, we’re going to speak with friend of the podcast, JOHN WILLIAMS on the CTA and 2024. He is the President of the Williams Law Firm in Delaware and President of INCNOW.COM, a corporate formation firm.

We’re going to talk about taking on this responsibility as an advisor and what businesses (big and small) might expect in 2024 and beyond with this new mandate.

Corporate Transparency Act- A Quick Review

1) Whom does it apply to and how big is this lift? 
2) What needs to be reported? Do we know how at this point?
3) By whom exactly?  Client?  Advisor? Paralegal?
4) What is the timing for reporting? How long do you have to report changes? Can you correct mistakes?
5) What are the penalties for getting this wrong?

For Advisers, RIA’s, Lawyers, CPA’s and MFO’s

6) How much time should compliance take? 

• Who is responsible?
  
• Simple ownership (90min) vs complex ownership
  
• Change in ownership
  
• If something goes wrong, who is liable (i.e. who goes to jail)?
  
• Paralegal liability
  

7) What are best practices for compliance?

• For clients?
  
• For advisors suggesting entities?
  
• For Administrators?
  

8) Who should be in this business? 

• Headcount?
  
• Is there liability insurance for advisors/admins?
  
• Are Law firms ready for this?  
  
• RIA’s and MFO’s? CPA’s looking to “help”?
  

9) What is a realistic cost for this? 

• Especially given ongoing service and liability? 
  
• Will clients understand what they are paying for and why?
  
• Can this be AI’ed away?
  

10) How are you thinking about it (for your business)?

• Is it a profit center?
  
• Is this for the “Faint of heart” or the tourist?
  
• Is there a danger in treating this as an accommodation?
  

11) Practical questions-

• Who is a control officer?  senior officers / directors / others (trustees)? An incorporator?
  
• Series LLC’s = multiple reports?
  
• Information sharing between FINCEN, IRS, DOJ others? 
  
• Is Privacy over?
  
• Should everyone get a FINCEN number?
  
• Are we entering a new era of corporate governance and record keeping for clients and their businesses? (I.e. is corporate governance going to be a “real thing” going forward?)
  

How to Find John Williams and his firm.

INCNOW.COM TWITTER

THE WILLIAMS LAW FIRM

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/