South Dakota Corporate Transparency Act Attorneys

In an effort to combat financial crimes and improve corporate transparency, the United States government introduced the Corporate Transparency Act (CTA) in January 2024. This legislation marks a significant shift in how businesses report and operate, emphasizing the need for transparency and compliance. Understanding the intricacies of the CTA and ensuring compliance can be daunting for business owners.

At Aspen Legacy Planning, our South Dakota business law attorneys are experienced in both business and corporate law, which enables us to provide our clients with comprehensive and integral legal services in those practice areas. We are here to help your business mitigate any risks associated with the Corporate Transparency Act and avoid any legal issues you could face because of the CTA.

To learn more about Aspen Legacy Planning, read our clients’ testimonials.

For more information about the Corporate Transparency Act and how we can help your business properly adhere to it, call (605) 610-4016 or contact us onlinetoday to schedule a no-obligation consultation with our business attorneys in Rapid City.

What Is the Corporate Transparency Act?

The CTA was enacted with the primary goal of uncovering the individuals ("beneficial owners") who own, control, and profit from companies registered in the United States. The act aims to deter and detect illegal activities, including money laundering, terrorism financing, and fraud, by making corporate ownership more transparent, this legislation mandates increased transparency regarding corporate ownership structures. Failure to comply with these requirements could result in severe civil and criminal penalties.

Key Provisions and Requirements under the CTA

Under the CTA, certain businesses are required to file a report with the Financial Crimes Enforcement Network (FinCEN) detailing their beneficial ownership information. This includes:

• Identifying Information: Names, birthdates, addresses, and a unique identifying number from an acceptable document (e.g., passport or driver’s license) of the beneficial owners.
• Reporting Company Details: Information regarding the reporting company itself, such as the company name, address, and purpose.

Not all businesses are subject to these requirements. The act provides exemptions for several categories of entities, including certain regulated companies and enterprises that meet specific criteria.

A Reporting Company is required to report either: (1) each Beneficial Owner’s name, date of birth, address, a unique identifying number (like a passport or driver’s license number), and a photo image of the document associated with the identifying number; or (2) each Beneficial Owner’s FinCEN Identifier (i.e., a unique identifying number that a Beneficial Owner may request from FinCEN). under a state statute that requires a filing with the state (e.g., a Delaware Statutory Trust). However, a trust is considered a Beneficial Owner of a Reporting Company when it owns 25 percent or more of the entity or has substantial control over it. In that case, providing the name of the trust is not sufficient to meet the CTA’s reporting requirements. Rather, the CTA “looks through” the trust to identify key parties to the trust, whose information must be reported by the Reporting Company. This includes:

1. A trustee, trust protector, directing party or other individual with authority to dispose of trust assets. For example, this includes a trustee with the power to sell an interest in the Reporting Company, transfer the interest to a beneficiary, or even abandon the interest.
2. A beneficiary who is the sole permissible recipient of trust income and principal. Importantly, this does not include multiple beneficiaries of a “pooled” trust, or contingent beneficiaries who do not have any current beneficial right to income or principal.
3. Any individual with the power to withdraw or direct the current disposition of substantially all of the trust assets. For example, this includes a beneficiary with a withdrawal right over all of the trust’s assets, a grantor of a revocable trust who has the right to revoke the trust, or a grantor of an irrevocable trust with a substitution power.
4. Any individual with the power to exercise substantial control over the Reporting Company (e.g., the power to vote stock or authority regarding important decisions such as reorganization, major expenditures, compensation of senior officers, or amending governing documents).
5. Any individual whose ownership interests meet the 25 percent threshold by aggregating the individual’s ownership interests in trust with any interests that the individual owns or controls directly or indirectly outside of the trust. For example, if an individual (a) owns 10 percent of the Reporting Company individually; and (b) is the sole income and principal beneficiary of a trust that owns 15 percent of a Reporting Company, then these percentages are aggregated to total 25 percent, which qualifies the individual as a Beneficial Owner whose information must be reported.

Owners outside of the trust that meet the ownership or control requirements. Therefore, when a trust is involved in the ownership or control of a Reporting Company, determining the business’s Beneficial Owners will not only require review of its governing documents and ownership structure, but also the terms of the trust agreement and related trust documents.

How Our Corporate Transparency Act Lawyers Can Help Your Business

Our legal team has years of experience assisting businesses of all types and sizes with legal issues and regulatory compliance. The following are a few of the ways our corporate transparency act lawyers can help your business:

• Understanding Applicability: One of the first steps in CTA compliance is determining whether your business falls under the act's requirements. Our Corporate Transparency Act attorneys can help clarify whether your business needs to report beneficial ownership information.
• Guidance on Reporting: If your business is subject to the CTA, accurately reporting beneficial ownership information is crucial. Our attorneys can guide you through the process, ensuring all necessary data is collected and reported in alignment with the act's requirements.
• Legal Advice: Beyond compliance, our Corporate Transparency Act attorneys can provide valuable legal advice about how to handle your business operations and strategy while still complying with the CTA. This may include advising you on how to structure your business entities to optimize for both transparency and operational efficiency.
• Ongoing Support: The regulatory environment surrounding the CTA is evolving, with new rules and guidance expected to emerge. Our attorneys can help you remain compliant over time and promptly adapt to any regulatory changes.

Estate and Gift Tax Planning Considerations

In addition to CTA compliance, it's crucial to address impending changes to estate and gift tax exemptions. With the current high exemption set to diminish in 2026, there's a finite window of opportunity to leverage existing tax benefits for estate planning purposes. Proactive measures, such as establishing tax-efficient trusts, can safeguard assets and maximize wealth transfer strategies.

In light of these impending regulatory changes, proactive planning and diligent compliance efforts are paramount. Should you require assistance in navigating the complexities of the Corporate Transparency Act or estate planning considerations, our team stands ready to provide tailored guidance and support.

Why Choose Aspen Legacy Planning?

The Corporate Transparency Act represents a significant milestone in enhancing corporate transparency and combating financial crimes in the United States. For business owners, navigating the requirements of the CTA can seem overwhelming, but it doesn't have to be. Engaging with our Corporate Transparency Act attorneys at Aspen Legacy Planning can provide businesses with the expertise and support necessary to ensure they comply with the CTA, mitigate legal risks related to the CTA, and are able to focus on what they do best—running their business.

Ready to get started? Give us a call at (605) 610-4016 or reach out to us onlinetoday to request a no-obligation consultation with our Corporate Transparency Act legal team in South Dakota.

Resources provided by the Financial Crimes Enforcement Network (FinCEN)

These links direct you to external sites

Notice of Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024

Corporate Transparency Act (Title LXIV, Sections 6401-6403 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021)

Corporate Transparency Act, 31 U.S.C. 5336 (Beneficial ownership reporting requirements)

Beneficial Ownership Information Reporting Rule Fact Sheet 

Beneficial Ownership Information Reporting Final Rule 

Use of FinCEN Identifiers for Reporting Beneficial Ownership Information of Entities Final Rule 

FinCEN Small Entity Compliance Guide 

FinCEN Beneficial Ownership Information Reporting Frequently Asked Questions (Updated 4/18/2024)

Proposed Anti-Money Laundering Regulations for Residential Real Estate Transfers

Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)