Industry InsightsFebruary 12, 2024

Oh BOI: The Corporate Transparency Act and CPA Firms

As of January 1, 2024, millions of U.S. companies are now required to file first-time paperwork with the U.S. Department of the Treasury. Here’s what you need to know about the Corporate Transparency Act [CTA]. What is the CTA exactly? Enacted in 2021, the CTA aims to combat illicit activity including tax fraud, money laundering, and […]

What is the CTA exactly?

Enacted in 2021, the CTA aims to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. It impacts millions of small businesses across the U.S.

Beneficial Ownership Information – What is that and why should I care?

In 2021, as part of the Corporate Transparency Act, the government enacted Beneficial Ownership Information filing. Beneficial Ownership Information (BOI) Reports must be filed by reporting companies within 30 Days of the company’s formation. If the reporting company already exists as of January 1, 2024, when it went into effect, it must file its initial BOI report by January 1, 2025. The failure to comply penalty with this new law may be up to $500 each day your business is out of compliance. Yes, this means if you are out of compliance for a year, you could incur penalties up to $182,500. There is a list of company types that are exempt from filing which you can find here.

Who is considered a beneficial owner of a company?

According to the CTA, an individual qualifies as a beneficial owner if they directly or indirectly have a significant ownership stake in a company. This person either exercises substantial control on the reporting company’s decisions or operations, owns at least 25% of the company’s shares, or has a similar level of control over the company’s equity.

What is substantial control really?

An individual exercises substantial control over a reporting company if the individual meets any of four general criteria:

The individual is a senior officer.

The individual has authority to appoint or remove certain officers or a majority of directors of the reporting company.

The individual is an important decision-maker.

The individual has any other form of substantial control over the reporting company.

What information must be reported about a company’s beneficial owners?

All reporting companies must provide their legal name and trademarks, as well as their current U.S. address, which could be either the address of its main business site or, for foreign-based companies, their U.S. operational location. They’ll also need to provide a taxpayer identification number and specify the jurisdiction where they were formed or registered.

This sounds complicated. Can you give me an example?

John and Jane formed a limited liability company (“LLC”) to own a rental property. Jane and John each own 50% of the entity and each is in a control position. The LLC has to file as a Reporting Company and both John and Jane have to file as beneficial owners.

Let’s say that Jane transferred her interests to her revocable trust. No biggie. She would still report that trust likely meets the exception as being “wholly revocable” and it would have no impact on her CTA filings.

Let’s say John got fancier and gifted his interests to a trust for his kids. John named his brother Tom as trustee. The trust benefits Tom’s three adult children. Tom and the three children have to file as Beneficial Owners.

If you are still confused by whether or not to file a BOI, we recommend filing the form to be on the safe side.

Can Go Figure file the BOI Report for me?

No. There are some legal issues surrounding CTA compliance as to whether or not this is deemed as “the practice of law”. Therefore, CPAs are being told by our insurance carriers not to do it. You can file the form yourself or have a legal professional file it for you. Our recommendation is to protect yourself and your business by hiring an attorney to file your BOI Report. In case you do not have an attorney to handle this for you, we recommend John T. Ankner of Saunders and Ankner, P.A., Attorneys at Law. John and his firm are ready to help you navigate the filing process in a timely and efficient manner. Email John@lawsaunders.com or visit www.lawsaunders.com.

Industry InsightsApril 7, 2019

What Price Patents?

Ask ‘How much does a business patent cost?’ and you’ll get a singularly unhelpful, ‘That depends.’ ‘On what?’ you ask. Excellent question…. Provisional Patents—They are simple, hold the date patents that function to establish first-to-file status for an invention. Shorter paperwork and less expansive than a regular patent application, as of 2019 the cost of […]

Ask ‘How much does a business patent cost?’ and you’ll get a singularly unhelpful, ‘That depends.’ ‘On what?’ you ask. Excellent question….

Provisional Patents—They are simple, hold the date patents that function to establish first-to-file status for an invention. Shorter paperwork and less expansive than a regular patent application, as of 2019 the cost of a provisional patent is $280, with the cost for a small entity at $140 and a micro-entity at $70.

Utility Patent—This is a step up from provisional. Utility Patents are for “any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof,” including internet patents, according to the USPTO. As of 2019, a utility patent application is $300, $150 for small entities and $75 for a micro entity.

Design Patent—A Design Patent protects “a new, original, and ornamental design for an article of manufacture.” Think shoes, clothing and the like. Today, the cost of a design patent application is $200, $100 for small entities and $50 for a micro entity.

Plant Patent—used to protect a plant hybrid that is a distinct and new plant variety. The cost of a plant patent application is $300, $150 for small entities and $75 for a micro entity.

Search Me! That’s our clever-ish way of saying, before you apply for a patent you’ll need to search existing patents for conflicts. The USPTO will search for you—for $600. You can search yourself—the USPTO website will walk you through it—much cheaper. Or, the best way—hire a patent attorney and pay the price. Could very well be worth it in the end.

Industry Insights

The Seven Keys To Getting A Business Bank Loan

Before the economic crisis of several years ago, getting a business loan from a bank was much easier. Now, not so much. Banks are leery today, but you can improve your odds with these seven important keys:Write a strong business plan. Tell the bank what the business entails, brag on yourself a bit, what your […]

Before the economic crisis of several years ago, getting a business loan from a bank was much easier. Now, not so much. Banks are leery today, but you can improve your odds with these seven important keys:

Write a strong business plan. Tell the bank what the business entails, brag on yourself a bit, what your short and long term goals are and how you plan to achieve them.

Be clear how you’ll spend the money. Are you buying new equipment? Need to expand? Want operating capital while you wait for payments to come in? This will help the bank decide which type of loan may be best for you.

Ask for the right amount. Seems like a no brainer but it is definitely not. Don’t ask for too little or too much. Do your homework. Get a tight handle on how much money you really need and why.

Polish your credit report. Basically, know what your personal and business credit reports reflect about you. Are they accurate? Are there any errors? Talk to the credit reporting agency that applies and get those errors rectified to raise your score.

Find a better bank. Do your homework and research the best banks for the type of loan you are interested in. You’ll want the bank with the best rates and most flexible approval guidelines.

Keep good records. If you don’t keep good records start now. Banks want to see balance sheets, cash flow, income statements. They want to see that you’ll be able to pay them back. So, prove it to them in black and white.