Corporate Transparency Act

If you have an LLC for privacy reasons you should be concerned.

32 million American small business will need to pay about $85 USD file PII and maintain that data is up to date and correct forever, or be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000 the law includes around 20 exemptions, such as publicly traded companies, U.S. operating companies with 20 or more full-time employees and $5 million in sales, and some others, which means that the burden of this rule falls primarily on small businesses, including solopreneurs (aka one-person entities).

Imagine a data breach of this size all related to business information. The scams have already started.

FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.

“The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages, or click on any links or scan any QR codes within them.”

https://www.fincen.gov/news/news-releases/us-beneficial-ownership-information-registry-now-accepting-reports

https://boiefiling.fincen.gov/

https://www.congress.gov/bill/116th-congress/house-bill/2513

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There was a case that is alleging this as unconstitutional.

If you haven’t filed this yet, I would wait.

Should I change the tags to good news for now…

https://www.fincen.gov/news/news-releases/updated-notice-regarding-national-small-business-united-v-yellen-no-522-cv-01448

No, I wouldn’t for now until more information is released, especially since it’s not fully resolved and could still be bad news. Honestly, it’s more neutral news, as it was bad news that was potentially overturned.

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I’m not sure this is a huge deal. The main reason you’d use an LLC is to hide your information from public records, not the government. That use-case doesn’t seem to be impacted.

Of course a data breach would be unfortunate, but the same could be said about the IRS or any other government agency you regularly interact with. Generally speaking, various US agencies already have a lot of information about US citizens collectively, and I don’t think anyone was promoting LLCs as a way around that? Maybe I’m wrong.

As a one-person entity, it’s still very annoying though.

Would having a sole proprietorship instead be better?