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End of Anonymous US LLCs

Patrick846

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Aug 19, 2018
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Congress Enacts Corporate Transparency Act Requiring Corporations, Limited Liability Companies and Similar Entities to Disclose Beneficial Ownership Information​



  • The Act requires Reporting Companies to disclose to the Financial Crimes Enforcement Network ("FinCEN") of the US Department of the Treasury the below personal information of the beneficial owners of such Reporting Companies. Such disclosure is required to be made through completion of a beneficial ownership statement that is filed at the time of formation (or, if the entity was formed prior to the passage of the Act, within two years after the effective date of the issuance of final regulations for the Act) containing the following information of the applicable beneficial owner(s):
    • Full legal name;
    • Current residential or business street address;
    • Date of birth; and
    • Identification number (such as a driver's license or passport number).

The FinCEN may, upon request, disclose such information to:
[...]
  • a foreign central authority of competent authority, under an international treaty, agreement or convention, or an official request made by law enforcement, judicial or prosecutorial authorities in a foreign country when no treaty, agreement or convention is available;

[...]
Finally, the Act prohibits the issuance of a certificate in bearer form evidencing either whole or fractional interest in any corporation, limited liability company, or other similar entity formed under the laws of any state or Indian tribe.

Any party that files an application for the formation of a Reporting Company that intentionally fails to comply with the Act will be liable for fines of no more than $500 for each day that there is a willful failure to report complete beneficial ownership information, and such parties may be subject to aggregate fines of up to $10,000 or a prison term of up to two years. Attorneys helping with corporate-registration paperwork on behalf of a client shall be included as parties subject to penalty, if they violate the Act.
 
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I thought the IRS already have the information for a US LCC. The only change that I see here is now the FinCEN also have it now, and they don't need to do a request to IRS.

Don't see a big change, it just political propaganda.
 
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ok so the change is you can't hide from the government anymore, which will cooperate with other government on criminal cases.
I have to agree as long as UBO is not public it is still a good place to incorporate for a legit offshore structure.
 
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I believe not much has changed, it you intended to do anything illegal it doesn't matter what rules they apply, they would have turned the company around anyway and reported the activity to the authorities.
 
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true I don't believe they did not already. USA and secrets, that to words that can't be connected at all in this context.
 
true I don't believe they did not already. USA and secrets, that to words that can't be connected at all in this context.
I am not 100% sure about that...
USA consider themselves the center of the world, or just the world, period.
They forced FATCA to chase US citizens' wealth, but they don't gain anything by taking the effort of keeping their part of FATCA with other countries by sharing information about non-US citizens' wealth positions in the US. Do they need to fear retaliation from EU? Yea right. China? Barely. Russia? Nah.
I might be completely disinformed, but I just don't see the US so motivated any time soon to export information via FATCA.
 
I am not 100% sure about that...
USA consider themselves the center of the world, or just the world, period.
They forced FATCA to chase US citizens' wealth, but they don't gain anything by taking the effort of keeping their part of FATCA with other countries by sharing information about non-US citizens' wealth positions in the US. Do they need to fear retaliation from EU? Yea right. China? Barely. Russia? Nah.
I might be completely disinformed, but I just don't see the US so motivated any time soon to export information via FATCA.
I doubt it either. They might share it with individual countries they have some other treaties with like Denmark or UK but not with everyone and especially in this Covid 19 situation. I suppose best bet is to get out of US anything before they start as anything is possible with the new liberal congress in power. Plan ahead and never regret later. Never think this won't happen and that won't happen.
With the way IRS is running right now I doubt they will do anything for 3-4 more years as things are bad with their stimulus checks getting lost everywhere by IRS.
 
II suppose best bet is to get out of US anything before they start as anything is possible with the new liberal congress in power. Plan ahead and never regret later. Never think this won't happen and that won't happen.
I agree. The new fully liberal Congress & POTUS may overturn for good these rules. On the other hand, POTUS is from Delaware. Does he really want to shoot himself in the foot? There are enough lobbyists with sizeable budgets to nudge him and Congress sufficiently "gently" to not play SJW too hard.
With the way IRS is running right now I doubt they will do anything for 3-4 more years as things are bad with their stimulus checks getting lost everywhere by IRS.
I'm afraid I am missing the point.
Shouldn't the IRS now be out for blood, to fill up the craters created by the stimulus programs?
Why should they be stuck for 3-4 years? What is happening with the stimulus checks?
 
It is a big change because it eliminates the anonymous holding LLCs.
If you went for the EIN/ITIN because you had taxable events, you had to disclose to IRS, but you could basically have a "Shelf company" who did nothing (dodgy) and was used to hold away foreign assets that no one really knew about. Ie. a person in Australia could have a holding LLC with no activity, but then list it as owning a bunch of aussie properties and no one would effectively know the real ubo owner. Not irs, not the aussies, no one but the person behind it.
 
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I agree. The new fully liberal Congress & POTUS may overturn for good these rules. On the other hand, POTUS is from Delaware. Does he really want to shoot himself in the foot? There are enough lobbyists with sizeable budgets to nudge him and Congress sufficiently "gently" to not play SJW too hard.

I'm afraid I am missing the point.
Shouldn't the IRS now be out for blood, to fill up the craters created by the stimulus programs?
Why should they be stuck for 3-4 years? What is happening with the stimulus checks?
Yes they will try to fill the coffers anyways they can that's for sure.
 
It is a big change because it eliminates the anonymous holding LLCs.
If you went for the EIN/ITIN because you had taxable events, you had to disclose to IRS, but you could basically have a "Shelf company" who did nothing (dodgy) and was used to hold away foreign assets that no one really knew about. Ie. a person in Australia could have a holding LLC with no activity, but then list it as owning a bunch of aussie properties and no one would effectively know the real ubo owner. Not irs, not the aussies, no one but the person behind it.
Agreed, but the transfer of assets to and from the LLC that you describe would be reportable transactions, so you would have to file form 5472. If Australian authorities don't like want they see, they can report the transactions to the IRS, but without UBO the IRS would not even know if the owner is a foreign person, so the penalty would be more difficult to enforce (but I am sure they could find a way if your business calls their attention, so still a bit risky).

With UBO, the only way not to have to file form 5472 is not to transfer any asset or money from/to the LLC. But what can you do with an LLC that does not make any reportable transaction? Only thing I can think of is to use it as front name for some registrations of anything not considered money or an asset... any ideas? I can't think of any so I am considering filing articles of dissolution for all my LLCs
 
To be honest, as long as my name is not public to everyone I'm happy
If that is all you are going for or others reading this thread, you can do that perfectly fine with a US LLC and even a UK LTD with full nominee service.

I'm not awar of how Cyprus is handling this any longer if full nominees are used, most are publishing UBO to - @CyprusLaw may be able to help here?
 
If that is all you are going for or others reading this thread, you can do that perfectly fine with a US LLC and even a UK LTD with full nominee service.

I'm not awar of how Cyprus is handling this any longer if full nominees are used, most are publishing UBO to - @CyprusLaw may be able to help here?
Pursuant to the 5th AMLD all EU member states have implemented the UBO Register. Companies have the obligation to register the details of the UBO (a UBO is anyone holding over 25% of the shareholding) in this register. The register is publicly available but a certain fee will have to be paid to have access to the UBO.
 
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Pursuant to the 5th AMLD all EU member states have implemented the UBO Register. Companies have the obligation to register the details of the UBO (a UBO is anyone holding over 25% of the shareholding) in this register. The register is publicly available but a certain fee will have to be paid to have access to the UBO.
The fee is nominal (€3.50). Online search is not yet available, you need to file a request. The Register replies after a few days with a certificate.

It should be noted that the data contained in the UBO Register is considered to be true as a matter of law, like all the information provided by public records.

Example:

6C1CFCD2-F614-4835-8A9C-E49D9A431A73.jpeg
 
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