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Beneficial Ownership Information Advice

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BENEFICIAL OWNERSHIP INFORMATION FILING ADVICE








The Corporate Transparency Act



WHAT IS A BENEFICIAL OWNERSHIP INTEREST (BOI) REPORT.

A Beneficial Ownership Information (BOI) Report is a filing requirement under
the Corporate Transparency Act (CTA) in the United States. The report is
submitted to the Financial Crimes Enforcement Network (FinCEN), a bureau of the
U.S. Department of the Treasury. The primary purpose of the BOI Report is to
provide information about the “beneficial owners” of certain business entities,
which include corporations, limited liability companies (LLCs), and other
similar entities.

A “beneficial owner” in this context is generally defined as an individual who,
directly or indirectly, either owns a significant stake (usually 25% or more) in
the company or has substantial control over the company. The BOI Report is
designed to identify the real individuals behind business entities, rather than
just the legal entities themselves.

Specifically, the BOI Report requires the disclosure of:

 * The full legal name, date of birth, current residential or business address,
   and an identification number (such as a passport or driver’s license number)
   for each beneficial owner.

 * Information about the reporting company itself, including its name, address,
   and the nature of its business activities.

The main goal of the BOI Report is to enhance transparency and prevent the
misuse of U.S. businesses for illicit purposes such as money laundering,
terrorist financing, and tax evasion. Companies subject to the CTA are obligated
to file a BOI Report and update the information within a certain time frame if
there are any changes. Failure to comply can result in civil and criminal
penalties.


WHICH COMPANIES ARE REQUIRED TO FILE BOI REPORTS

Domestic and Foreign Entities that are in existence as of January 1, 2024 or
that are formed on or after January 1, 2024.

 * Domestic Reporting Company: a corporation; a limited liability company; or
   other entity that is created by the filing of a document with a secretary of
   state or any similar office under the law of a state or Indian tribe

 * Foreign Reporting Company: any entity that is a corporation, limited
   liability company, or other entity that is formed under the law of a foreign
   country and that is registered to do business in the United States by the
   filing of a document with a secretary of state or equivalent office under the
   law of a state or Indian tribe.


WHAT DETAILS ARE INCLUDED IN THE BENEFICIAL OWNERSHIP REPORT

BOI (Beneficial Ownership Interest) Reports filed with FinCEN will report the
identity of two categories of individuals as they relate to the Reporting
Entity:

 * the beneficial owners of the entity (required by all existing and new
   entities)

and

 * the “company applicant” of the entity (individuals (up to 2) who have filed
   an application with specified governmental authorities to create the entity
   or register it to do business. (required only by new entities formed on or
   after January 1, 2024)

A Beneficial Ownership Information (BOI) reports four pieces of information
about the Beneficial Owners, and in some cases, the Company Applicants

 1. the individual’s full legal name

 2. date of birth

 3. current residential or business street address

 4. a unique identifying number from an acceptable identification document ( g.,
    a passport)—or the individual’s FinCEN identifier

Details on the Reporting Company Information to be Provided:

 * Full legal name

 * Any trade name or “doing business as” name

 * Complete current address:

    * For US-based companies: Street address of the principal place of business
   
    * For non-US-based companies: Street address of the primary location in the
      US where the company conducts business

 * State, Tribal, or foreign jurisdiction of formation (For foreign reporting
   companies: The State or Tribal jurisdiction where the company first
   registers)

 * IRS Taxpayer Identification Number (TIN) or Employer Identification Number
   (EIN), or for foreign companies without a TIN, a tax identification number
   issued by a foreign jurisdiction

Beneficial Owner Information ( For every individual who is a beneficial owner of
such reporting company) AND Company Applicant Information (up to 2 persons)

 * Full legal name

 * Date of birth

 * Complete current address

 * A unique identifying number from one of the following:

    * A non-expired US-issued passport
   
    * A non-expired identification document issued by a State, local government,
      or Indian tribe
   
    * A non-expired driver’s license issued by a State
   
    * A non-expired passport issued by a foreign government (if the individual
      does not possess any of the documents above)

 * An image of the document from which the unique identifying number was
   obtained

For companies formed after January 1, 2024, they must also provide information
for up to 2 company applicants:

Company Applicant Information

 * Full legal name

 * Date of birth

 * Complete current address

    * In the case of a company applicant who forms or registers an entity during
      such company applicant’s business, the street address of such business; or
   
    * In any other case, the individual’s residential street address

 * A unique identifying number from one of the following:

    * A non-expired US-issued passport
   
    * A non-expired identification document issued by a State, local government,
      or Indian tribe
   
    * A non-expired driver’s license issued by a State
   
    * A non-expired passport issued by a foreign government (if the individual
      does not possess any of the documents above)





WHEN ARE THE BOI REPORTS DUE

A reporting company created or registered to do business before January 1, 2024,
will have until January 1, 2025 to file its initial beneficial ownership
information report.

A reporting company created or registered on or after January 1, 2024, will have
30 days to file its initial beneficial ownership information report. This 30-day
deadline runs from the time the company receives actual notice that its creation
or registration is effective, or after a secretary of state or similar office
first provides public notice of its creation or registration, whichever is
earlier.





WHO IS CONSIDERED A BENEFICIAL OWNER FOR PURPOSES OF THE BOI REPORT

A Beneficial Owner of an entity is defined as either:

 1. “any individual who, directly or indirectly, either exercises substantial
    control over such reporting company or owns or controls at least 25 percent
    of the ownership interests of such reporting company.”

Or

 2. Any individual who exerts substantial control of the entity. Substantial
    controlled is defined in 3 ways:

     * anyone who provides the entity service as a senior officer of a reporting
       company;
    
     * authority over the appointment or removal of any senior officer or a
       majority or dominant minority of the board of directors (or similar body)
       of a reporting company;
    
     * and direction, determination, or decision of, or substantial influence
       over, important matters affecting a reporting company.

In summary:

A beneficial owner is an individual who either:

Has substantial control over a company, typically as a senior officer or through
decision-making authority, such as appointing senior officers or a majority of
the board, or significantly influencing important company matters, or

Owns or controls at least 25% of the company’s ownership interests, including
equity, capital or profit interests, convertible instruments, and other rights
to acquire interests in the company.

This can apply directly or indirectly, accommodating various business structures
and management styles.

In trusts, the beneficial owner may be the trustee, an individual with authority
over trust assets, a beneficiary with certain rights, or a grantor or settlor
who can revoke the trust or withdraw its assets.

Ownership interest is calculated by comparing an individual’s total interests to
all of the company’s outstanding interests, with specifics depending on the type
of interest issued. Options and similar interests are treated as exercised
during this calculation. The rule is designed to be clear yet flexible for
different ownership structures, as per the CTA’s requirements.

In Detail:

An individual is deemed to have “substantial control” over a reporting company
if they serve as a senior officer, possess authority over senior officer
appointments or the removal of a majority of the board of directors, or can
significantly influence important company decisions. Exceptions are corporate
secretary and treasurer roles, which generally yield minimal control over the
company. Substantial control can be direct or indirect and is adaptable to
diverse business structures and management styles.

Ownership is defined by a minimum of 25% control of a company’s ownership
interests, which include equity, capital or profit interests, convertible
instruments, and other rights to acquire company interests. Debt instruments are
considered if they allow the holder rights equivalent to other specified types
of interests, including conversion to such interests. These definitions are
usually straightforward, but complex business structures or financial
arrangements might necessitate extra scrutiny and professional advice.

Trust assets are deemed to be owned or controlled by trustees and individuals
with authority over trust assets, as well as by beneficiaries under certain
conditions or grantors or settlors who can revoke the trust or withdraw its
assets.

The calculation of total ownership interests is based on an individual’s total
interests relative to the company’s total outstanding interests, including
specific guidelines for entities issuing capital and profit interests, shares,
and a catch-all provision for entities that don’t fit the previous categories.
Options and similar interests are considered exercised in these calculations.
The rule provides clarity and flexibility for various ownership structures,
marking a departure from the approach of the 2016 CDD Rule in line with CTA
requirements.


WHO IS NOT CONSIDERED A BENEFICIAL OWNER:

 * Minor Child, provided that parent or guardian is reported

 * An individual acting as a Nominee, Intermediary, Custodian, or Agent on
   behalf of another individual

 * an individual acting solely as an employee of a reporting company in
   specified circumstances

 * an individual whose only interest in a reporting company is a future interest
   through a right of inheritance

 * a creditor of a reporting company





WHAT IS SUBSTANTIAL CONTROL FOR PURPOSES OF DETERMINING WHO IS CONSIDERED A
BENEFICIAL OWNER

An individual can exercise substantial control over a reporting company in four
different ways. If the individual falls into any of the categories below, the
individual is exercising substantial control:

 * The individual is a senior officer (the company’s president, chief financial
   officer, general counsel, chief executive officer, chief operating officer,
   or any other officer who performs a similar function).

 * The individual has the authority to appoint or remove certain officers or a
   majority of directors (or similar body) of the reporting company.

 * The individual is an important decision-maker for the reporting company. See
   Question D.3 for more information.

 * The individual has any other form of substantial control over the reporting
   company as explained further in FinCEN’s Small Entity Compliance Guide (see
   Chapter 2.1, “What is substantial control?”).


WHO IS EXEMPT FROM HAVING TO FILE A BOI REPORT

Financial Institutions and Markets:

 * Bank

 * Credit union

 * Depository institution holding company

 * Money services business

 * Broker or dealer in securities

 * Securities exchange or clearing agency

 * Other Exchange Act registered entity

 * Commodity Exchange Act registered entity

 * Financial market utility

 * Pooled investment vehicle (defined as: )

    * Any investment company, as defined in section 3(a) of the Investment
      Company Act of 1940 (15 U.S.C. 80a-3(a)); or
   
    * Any company that:
   
       * Would be an investment company under that section but for the exclusion
         provided from that definition by paragraph (1) or (7) of section 3(c)
         of that Act (15 U.S.C. 80a-3(c)); and
      
       * Is identified by its legal name by the applicable investment adviser in
         its Form ADV (or successor form) filed with the Securities and Exchange
         Commission or will be so identified in the next annual updating
         amendment to Form ADV required to be filed by the applicable investment
         adviser pursuant to rule 204-1 under the Investment Advisers Act of
         1940 (17 CFR 275.204-1

Government and Public Entities:

 * Governmental authority

 * Public utility

 * Tax-exempt entity

 * Entity assisting a tax-exempt entity

Insurance Companies:

 * Insurance company

 * State-licensed insurance producer

Securities and Investment Entities:

 * Securities reporting issuer

 * Venture capital fund adviser

 * An investment company or investment adviser

    * An investment company or investment adviser is Any entity that is:
   
       * An investment company as defined in section 3 of the Investment Company
         Act of 1940 (15 U.S.C. 80a-3), or is an investment adviser as defined
         in section 202 of the Investment Advisers Act of 1940 (15 U.S.C.
         80b-2);

and

 * Registered with the Securities and Exchange Commission under the Investment
   Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or the Investment Advisers Act
   of 1940 (15 U.S.C. 80b-1 et seq.).

Other Entities:

 * Accounting firms

 * Large operating company (must meet three criteria)

    * “employs more than 20 employees on a full-time basis in the United
      States”;
   
    * “filed in the previous year federal income tax returns in the United
      States demonstrating more than $5,000,000 in gross receipts or sales in
      the aggregate,” including the receipts or sales of other entities owned by
      the entity and through which the entity operates; and
   
    * “has an operating presence at a physical office within the United Stat

 * Inactive entity (an entity that meets all of the following criteria: )

    * Was in existence on or before January 1, 2020;
   
    * Is not engaged in active business;
   
    * Is not owned by a foreign person, whether directly or indirectly, wholly
      or partially;
   
    * Has not experienced any change in ownership in the preceding twelve month
      period;
   
    * Has not sent or received any funds in an amount greater than $1,000,
      either directly or through any financial account in which the entity or
      any affiliate of the entity had an interest, in the preceding twelve month
      period; and
   
    * Does not otherwise hold any kind or type of assets, whether in the United
      States or abroad, including any ownership interest in any corporation,
      limited liability company, or other similar entity.

 * Subsidiary of certain exempt entities.





WHAT DOES IT MEAN TO BE AN “INACTIVE ENTITY” FOR PURPOSES OF BEING EXEMPT FROM
FILING A BOI REPORT

An entity is exempt from filing BOI reports with FINCEN if it qualifies as an
‘Inactive Entity,’ as defined by meeting ALL of the following six conditions:

 1. The entity was in existence on or before January 1, 2020.

 2. The entity is not engaged in active business.

 3. The entity is not owned by a foreign person, whether directly or indirectly,
    wholly or partially. “Foreign person” means a person who is not a United
    States person. A United States person is defined in section 7701(a)(30) of
    the Internal Revenue Code of 1986 as a citizen or resident of the United
    States, domestic partnership and corporation, and other estates and trusts.

 4. The entity has not experienced any change in ownership in the preceding
    twelve-month period.

 5. The entity has not sent or received any funds in an amount greater than
    $1,000, either directly or through any financial account in which the entity
    or any affiliate of the entity had an interest, in the preceding
    twelve-month period.

 6. The entity does not otherwise hold any kind or type of assets, whether in
    the United States or abroad, including any ownership interest in any
    corporation, limited liability company, or other similar entity





WHAT DOES IT MEAN TO BE A “LARGE OPERATING COMPANY” FOR PURPOSES OF BEING EXEMPT
FROM FILING A BOI REPORT

An entity qualifies for this exemption if all six of the following criteria
apply:

 1. The entity employs more than 20 full time employees, when applying the
    meaning of full-time employee provided in 26 CFR 54.4980H-1(a) and
    54.4980H-3. In general, “full-time employee” means, with respect to a month,
    an employee who is employed an average of at least 30 hours of service per
    week with an employer.

 2. More than 20 full-time employees of the entity are employed in the “United
    States,” as that term is defined in 31 CFR 1010.100(hhh).

 3. The entity has an operating presence at a physical office within the United
    States. “Operating presence at a physical office within the United States”
    means that an entity regularly conducts its business at a physical location
    in the United States that the entity owns or leases and that is physically
    distinct from the place of business of any other unaffiliated entity.

 4. The entity entity filed a Federal income tax or information return in the
    United States for the previous year demonstrating more than $5,000,000 in
    gross receipts or sales. If the entity is part of an affiliated group of
    corporations within the meaning of 26 U.S.C. 1504, refer to the consolidated
    return for such group.

 5. The entity reported this greater-than-$5,000,000 amount as gross receipts or
    sales (net of returns and allowances) on the entity’s IRS Form 1120,
    consolidated IRS Form 1120, IRS Form 1120-S, IRS Form 1065, or other
    applicable IRS form.

 6. When gross receipts or sales from sources outside the United States, as
    determined under Federal income tax principle, are excluded from the
    entity’s amount of gross receipts or sales, the amount remains greater than
    $5,000,000.


WHAT ARE THE BOI FILING RULES FOR FOREIGN POOLED INVESTMENT VEHICLES?

Foreign pooled investment companies qualify for this exemption if both of the
following criteria apply:

Criteria #1.

The entity is a pooled investment vehicle if either of these statements apply to
the entity:

 * Is an investment company, as defined in section 3(a) of the Investment
   Company Act of 1940 (15 U.S.C. 80a-3(a);

or

 * Is a company that would be an investment company under that section but for
   the exclusion provided from that definition by paragraph (1) or (7) of
   section 3(c) of that Act (15 U.S.C. 80a-3(c)); and is identified by its legal
   name by the applicable investment adviser in its Form ADV, (or successor
   form) filed with the Securities and Exchange Commission or will be so
   identified in the next annual updating amendment to Form ADV required to be
   filed by the applicable investment adviser pursuant to rule 204-1 under the
   Investment Advisers Act of 1940 (17 CFR 275.204-1).

Criteria #2: 

The entity is operated or advised by any of these types of exempt entities:

 * Bank, as defined in Exemption #3;

 * Credit union, as defined in Exemption #4;

 * Broker or dealer in securities, as defined in Exemption #7;

 * Investment company or investment adviser, as defined in Exemption #10; or

 * Venture capital fund adviser, as defined in Exemption #11

(the definitions to meet these exemptions are included in the next FAQ)

Special rule for foreign pooled investment vehicles.

If an entity meets the criteria of Exemption #18 and is formed under the laws of
a foreign country, the entity is subject to a separate reporting requirement.
These companies are referred to as “foreign pooled investment vehicles” in the
Reporting Rule and their reporting requirement is explained in Chapter 4.2 of
this Guide. See special rule at 1010.380(b)(2)(iii).

Chapter 4.2:

 3. Foreign pooled investment vehicle:

You do not need to report information about each beneficial owner and company
applicant if your company was formed under the laws of a foreign country and
would be a reporting company if not for the pooled investment vehicle exemption
(Exemption #18).

If this special rule applies, you must report one individual who exercises
substantial control over the company. You do not need to report any company
applicants. If more than one individual exercises substantial control over the
company, you must report information about the individual who has the greatest
authority over the strategic management of the company





WHO CAN ACCESS BENEFICIAL OWNERSHIP INFORMATION UNDER THE CORPORATE TRANSPARENCY
ACT

FinCEN will permit Federal, State, local, and Tribal officials, as well as
certain foreign officials who submit a request through a U.S. Federal government
agency, to obtain beneficial ownership information for authorized activities
related to national security, intelligence, and law enforcement. Financial
institutions will also have access to beneficial ownership information in
certain circumstances, with the consent of the reporting company. Those
financial institutions’ regulators will also have access to beneficial ownership
information when they supervise the financial institutions.

FinCEN is developing the rules that will govern access to and handling of
beneficial ownership information. Beneficial ownership information reported to
FinCEN will be stored in a secure, non-public database using rigorous
information security methods and controls typically used in the Federal
government to protect non-classified yet sensitive information systems at the
highest security level. FinCEN will work closely with those authorized to access
beneficial ownership information to ensure that they understand their roles and
responsibilities to ensure that the reported information is used only for
authorized purposes and handled in a way that protects its security and
confidentiality.


WHAT ARE THE CTA AND BOI REPORTING REQUIREMENTS FOR COMPANIES EXISTING AS OF
JANUARY 1, 2024, COMPARED TO COMPANIES FORMED ON OR AFTER THAT DATE

Only reporting companies created or registered on or after January 1, 2024, will
need to report their company applicants.

A company that must report its company applicants will have only up to two
individuals who could qualify as company applicants:

 1. The individual who directly files the document that creates or registers the
    company; and

 2. If more than one person is involved in the filing, the individual is
    primarily responsible for directing or controlling the filing.

The following flowchart can help identify the company applicant.


WHAT ARE THE PENALTIES FOR NOT COMPLYING WITH THIS REQUIREMENT?

If a person has reason to believe that a report filed with FinCEN contains
inaccurate information and voluntarily submits a report correcting the
information within 90 days of the deadline for the original report, then the
Corporate Transparency Act creates a safe harbor from penalty. However, should a
person willfully fail to report complete or updated beneficial ownership
information to FinCEN as required under the Reporting Rule, FinCEN will
determine the appropriate enforcement response in consideration of its published
enforcement factors.

The willful failure to report complete or updated beneficial ownership
information to FinCEN, or the willful provision of or attempt to provide false
or fraudulent beneficial ownership information may result in civil or criminal
penalties, including civil penalties of up to $500 for each day that the
violation continues, or criminal penalties including imprisonment for up to two
years and/or a fine of up to $10,000. Senior officers of an entity that fails to
file a required BOI report may be held accountable for that failure.

Providing false or fraudulent beneficial ownership information could include
providing false identifying information about an individual identified in a BOI
report, such as by providing a copy of a fraudulent identifying document.

Additionally, a person may be subject to civil and/or criminal penalties for
willfully causing a company not to file a required BOI report or to report
incomplete or false beneficial ownership information to FinCEN.

For example, an individual who qualifies as a beneficial owner or a company
applicant might refuse to provide information, knowing that a company would not
be able to provide complete beneficial ownership information to FinCEN without
it. Also, an individual might provide false information to a company, knowing
that information is meant to be reported to FinCEN


HOW CAN I LEARN MORE INFORMATION ABOUT THE CTA AND BOI

Official Guidelines: FinCEN Small Business Resources

Legal Advice:  Consult your legal expert well-versed in compliance regulations
for a comprehensive understanding.


HOW CAN STOCKTON MOBILE NOTARY ASSIST ME WITH THIS REQUIREMENT?

Stockton Mobile Notary Service has received training and certification as a
facilitator for filing Beneficial Ownership Information (BOI). We take pride in
offering a comprehensive solution to assist your organization in navigating the
regulatory requirements of the Corporate Transparency Act (CTA)

As your CTA compliance partner, our comprehensive suite of services includes:

 * CTA Compliance Consulting: We will examine your organizational structure(s)
   to determine your exact compliance obligations under the CTA regulations. Our
   detailed analysis will also identify any potential exemptions from filing
   that your organization(s) may be eligible for. Upon the completion of our
   thorough review, we will provide a clear, comprehensive summary of your
   filing obligations and deadlines.

 * Beneficial Ownership Assessment: We will help your organization identify who
   your beneficial owners are based on the criteria stipulated in the CTA. This
   includes assessing substantial control and ownership interest thresholds,
   taking into consideration the attribution rules.

 * Company Applicant Identification: We will assist in identifying the company
   applicants, considering whether they are individuals directly involved in the
   filing process, who are primarily responsible for directing or controlling
   the filing.

 * BOI Reporting and CTA Compliance: Our team will prepare and file the
   Beneficial Ownership Information (BOI) reports on your behalf, ensuring all
   necessary details are accurately and sufficiently provided within the
   guidelines and deadlines specified.

 * FinCEN Identifier Application: Where applicable and beneficial, we will
   assist clients in applying for a FinCEN Identifier. This would include
   supporting them in gathering the necessary identifying information (the four
   pieces required for an individual BOI report or the initial report for
   reporting companies).

 * Continuous Support: Our team will provide ongoing advisory support on CTA
   rules, regulatory updates, and best practices to maintain compliance,
   including guidance on certification and due diligence requirements.





Let us help you file your Beneficial Information



 Ownership report quickly and accurately

AVOID PENALTIES, INCLUDING IMPRISONMENT FOR UP TO TWO YEARS AND/OR FINES UP TO
$10,000, AND CIVIL FINES OVER $500/DAY.

FILE YOUR BENEFICIAL OWNERSHIP REPORT TODAY.

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