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I see no comments so far about the Corporate Transparency Act[1] and how it affects privacy with LLCs, etc. The US government will soon have a database of all

I see no comments so far about the Corporate Transparency Act[1] and how it affects privacy with LLCs, etc. The US government will soon have a database of all (complying) beneficial owners. This database will eventually be hacked, leaked, shared with local law enforcement (further allowing it to be leaked). How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? [1] https://www.uschamber.com/co/start/strategy/small-business-corporate-transparency-act https://www.uschamber.com/co/start/strategy/small-business-c...

yieldcrv 2y ago
It was immediately challenged as soon as citizens could get standing this year A judge ruled it unconstitutional - narrowly only for the organizations and their members that filed the case - and its currently being appealed by the US gov its going to the 5th circuit though so rich people don't have to do anything, this regulation is DOA its interesting what cases make headline news and whats relegated to law journals
- cj 2y ago
  > its interesting what cases make headline news and whats relegated to law journals It certainly made headlines to people its impacts. 2 of my law firms sent out alerts. (They send out alerts maybe 1-2 per year whenever a significant legal change is happening - I think the last alert was the Wayfair sales tax Supreme Court decision)
  - yieldcrv 2y ago
    yeah I filed a flurry of anonymous LLCs via intermediaries via my lawyer at the end of last year since the new law initially only affects business entities created on or after Jan 1 2024, and older ones starting to need reporting just in Jan 2025 I took one look at the law and figured that I won’t have to do it by 2025 because it’ll get declared unconstitutional so far my bingo board is working out
arminiusreturns 2y ago
Rich people get out of it because all their main hidey-holes (Banking, Insurance, etc) are exempted.
DyslexicAtheist 2y ago
isn't the CTA US only? or would it have jurisdiction for a structure in UAE, Channel Islands, Dublin, or Luxembourg etc. When it comes to actual personal wealth management (not corporate tax optimization) there is also Austria, Lichtenstein, Geneve, Monaco, etc which are all very livable for HNWI and their families.
- mamonster 2y ago
  Lichtenstein isn't super livable, there is absolutely nothing to do in Vaduz. Geneva and Monaco sure but one thing you have to realize about Geneva/Monaco is that for simply HNWI(UHNWI is 25 mil and up) Monaco is too expensive and Geneva has a horrible ratio of living costs to living quality(the expensive hotel quarter is right next to the "open drug/prostitution market at midnight on a Saturday" quarter). Geneva basically lost its lustre for 10-20 million networth foreigners after Cologny became saturated and overpriced over the last 10-15 years.
- Scoundreller 2y ago
  Did you mean Andorra, not Austria?
V__ 2y ago
It seems really weird that you could do business with a company and not know who your actually doing business with. Also, it's kinda weird that there is no expectation of privacy except when you want to hide your assets.
- bdowling 2y ago
  Often no member of the public does business with these corporations. E.g., a corporation set up by a celebrity to own a private home and keep her address out of public databases.
  - BLKNSLVR 2y ago
    I don't think that's any kind of justification. It doesn't matter whether it's a member of the public or another business or a government agency, there should be a known person or people responsible for the actions of any company to be held responsible for breach of contracts or bad actions. All business is based on contracts of agreements, and the whole thing would entirely fall apart if no one could be held accountable for breach of contract. There's a lot of talk about the increase in KYC for individuals setting up accounts with banks and other financial institutions for reasons of anti money laundering. And yet anonymity is still allowed (and effectively encouraged) in business ownership which could facilitate far greater amounts of money laundering more easily. Ever since reading about Mossack Fonseca it has bothered me (not confused me though, since the rules are made by the people who most benefit from it).
    - nradov 2y ago
      That rather misses the point. The entire reason we have corporations is to abstract those issues away. For most routine business it's better to deal with a faceless corporation instead of trying to personalize everything. The corporation itself can be held accountable for contract compliance and in extreme cases you can get a court order to seize corporate assets; that's much easier than trying to seize and auction off the CEO's personal art collection or whatever.
Analemma_ 2y ago
Companies should not be allowed to have secret ownership; I don't give a shit if this data is leaked. Corporations are a legal fiction, and so they have no right to or expectation of privacy, like there should be for persons with e.g. individual tax records. The basic operation of markets depends on having as little information asymmetry as possible between opposite sides of a transaction, and part of that means knowing who you're doing business with to make informed decisions about the reputation of your counterparty.
- deleted 2y ago
  [deleted]
- kylecordes 2y ago
  Large publicly traded companies sometimes already have pseudo-secret/anonymous ownership, with most of the shares held by a giant mutual funds etc.
  - Gormo 2y ago
    Large publicly traded companies are entirely exempted from this legislation.
- Gormo 2y ago
  You are of course free to decide whether or not to do business with an organization based on how well you know/trust the ownership, and decline do do business that are evasive about their ownership at your own prerogative. I'm not sure why ownership needs to be openly published in advance -- you can always query them confidentially through private correspondence -- or how having ownership compiled into a federal database that you don't have access to (unless you have corrupt influence over the relevant agency) will help you.
erellsworth 2y ago
> How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? I mean, I think the whole point of the act is to stop "rich people" from maintaining privacy/secrecy in regards to the businesses they own. And that's a good thing.
- klyrs 2y ago
  You seem to be under the impression that the Act will have its intended effect and that OC was bemoaning that. I read this as, "with the Act in place, how will its intent be subverted by those in power"
- Gormo 2y ago
  > I mean, I think the whole point of the act is to stop "rich people" from maintaining privacy/secrecy in regards to the businesses they own. No, the act has little effect on "rich people". It applies only to non-public firms with 20 or fewer employees, and exempts most firms in the banking and finance industries. It encumbers your local barbershop and the mom-and-pop restaurant on the corner, but the "rich people" get a pass. > And that's a good thing. It turns out that "rich people" have as much right to maintain the privacy of sensitive personal information as anyone else.
altruios 2y ago
Name a company that is legal to run that SHOULD have it's owner's identity hidden... Only those that dwell in darkness fear the light. Exposing who own these LLC's seems like a solid 'pro-truth' move for America.
- toolz 2y ago
  A company that specializes in helping people escape from horrible rulers would be an example. Not everything deserves to be public. There are always as many good reasons to hide as there are entities that need to be hidden from.
  - newsclues 2y ago
    If a company that specializes in upsetting “rulers” their security shouldn’t be security through obscurity and it would be harder to trust than Former Spec Op Dudes Name Incorporated Because if you insist on privacy for the “helping people escape rulers” business the money laundering and criminals will suddenly be in that building!
    - ericd 2y ago
      As always, obscurity is one (often very helpful) layer of a multilayered defensive strategy. The meme that it's useless needs to go away. If you have a safe at home, you should probably hide its existence, because even if power tools couldn't reliably crack a safe (they can), there's always the $5 wrench strategy.
    - toolz 2y ago
      Criminals and launderers have never and will likely never need to incorporate. Sure, it's a tool they might use, but at best you'd take some of their margins away from them. Doesn't seem like a great trade to me, stealing some of the criminals profits in exchange for exposing the people who need privacy.
      - BLKNSLVR 2y ago
        Launderers are always incorporated. If they weren't, they wouldn't be able to launder.
CodeWriter23 2y ago
> How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? By hiring ex-CIA Agents having experience with setting up shell corporations after said act.
- clamprecht 2y ago
  Then I ask the same question you just sidestepped: how will the ex-CIA agents maintain privacy/secrecy after the Act?
  - CodeWriter23 2y ago
    Ask them, I’m not a subject matter expert on such things. I can however infer they will have that capability because shell corporations are a fundamental building block of all their ops.
janalsncm 2y ago
> This database will eventually be hacked, leaked, shared with local law enforcement We could extend this argument to individual taxpayer info too. Have these things happened with taxpayer info, and does that mean the IRS shouldn’t get to know where you live?
- hughesjj 2y ago
  > Have these things happened with taxpayer info Actually, yes. Same with voter registration. Hell in WA state voter registration is public knowledge, along with whether you voted in any given election. Try it if you want it, but read the terms of service. Lots of "if you use this for advertising it's a felony" for anyone looking to grift https://www.sos.wa.gov/washington-voter-registration-database-extract https://www.sos.wa.gov/washington-voter-registration-databas...
jollyllama 2y ago
Doesn't it only apply to new filings? Aren't all the old entities grandfathered in?
- PopAlongKid 2y ago
  No. New entities have a 90-day window to file. Entities existing before 2024 must file no later by Jan 1 2025.
Gormo 2y ago
> The US government will soon have a database of all (complying) beneficial owners. This database will eventually be hacked, leaked, shared with local law enforcement (further allowing it to be leaked). The BOI requirements of the CTA were recently ruled unconstitutional (as exceeding federal commerce-clause power and encroaching on powers reserved to states) in the first major test case before a federal court. [1] Since it was ruled unconstitutional on reserved powers grounds, they didn't even reach the 4th amendment implications, but there may be further consideration as these cases make their way up the court heirarchy. It's definitely not certain that this database is going anywhere. > How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? The same way they do now. The CTA as formulated was only binding on non-publicly-traded companies with 20 or fewer employees. It also explicitly exempted companies whose primary business activity is financial services or asset holdings. This is why many regard it as an attack on small business disguised as an accountability measure for big business. [1] https://www.thomsonreuters.com/en-us/posts/corporates/cta-unconstitutional-ruling/ https://www.thomsonreuters.com/en-us/posts/corporates/cta-un...
deleted 2y ago
[deleted]
nerdawson 2y ago
> This database will eventually be hacked, leaked, shared with local law enforcement (further allowing it to be leaked). In the UK, all of that information is freely available to anyone via Companies House.

yieldcrv 2y ago

It was immediately challenged as soon as citizens could get standing this year A judge ruled it unconstitutional - narrowly only for the organizations and their members that filed the case - and its currently being appealed by the US gov its going to the 5th circuit though so rich people don't have to do anything, this regulation is DOA its interesting what cases make headline news and whats relegated to law journals

cj 2y ago
> its interesting what cases make headline news and whats relegated to law journals It certainly made headlines to people its impacts. 2 of my law firms sent out alerts. (They send out alerts maybe 1-2 per year whenever a significant legal change is happening - I think the last alert was the Wayfair sales tax Supreme Court decision)
- yieldcrv 2y ago
  yeah I filed a flurry of anonymous LLCs via intermediaries via my lawyer at the end of last year since the new law initially only affects business entities created on or after Jan 1 2024, and older ones starting to need reporting just in Jan 2025 I took one look at the law and figured that I won’t have to do it by 2025 because it’ll get declared unconstitutional so far my bingo board is working out

arminiusreturns 2y ago

Rich people get out of it because all their main hidey-holes (Banking, Insurance, etc) are exempted.

DyslexicAtheist 2y ago

isn't the CTA US only? or would it have jurisdiction for a structure in UAE, Channel Islands, Dublin, or Luxembourg etc. When it comes to actual personal wealth management (not corporate tax optimization) there is also Austria, Lichtenstein, Geneve, Monaco, etc which are all very livable for HNWI and their families.

mamonster 2y ago
Lichtenstein isn't super livable, there is absolutely nothing to do in Vaduz. Geneva and Monaco sure but one thing you have to realize about Geneva/Monaco is that for simply HNWI(UHNWI is 25 mil and up) Monaco is too expensive and Geneva has a horrible ratio of living costs to living quality(the expensive hotel quarter is right next to the "open drug/prostitution market at midnight on a Saturday" quarter). Geneva basically lost its lustre for 10-20 million networth foreigners after Cologny became saturated and overpriced over the last 10-15 years.
Scoundreller 2y ago
Did you mean Andorra, not Austria?

V__ 2y ago

It seems really weird that you could do business with a company and not know who your actually doing business with. Also, it's kinda weird that there is no expectation of privacy except when you want to hide your assets.

bdowling 2y ago
Often no member of the public does business with these corporations. E.g., a corporation set up by a celebrity to own a private home and keep her address out of public databases.
- BLKNSLVR 2y ago
  I don't think that's any kind of justification. It doesn't matter whether it's a member of the public or another business or a government agency, there should be a known person or people responsible for the actions of any company to be held responsible for breach of contracts or bad actions. All business is based on contracts of agreements, and the whole thing would entirely fall apart if no one could be held accountable for breach of contract. There's a lot of talk about the increase in KYC for individuals setting up accounts with banks and other financial institutions for reasons of anti money laundering. And yet anonymity is still allowed (and effectively encouraged) in business ownership which could facilitate far greater amounts of money laundering more easily. Ever since reading about Mossack Fonseca it has bothered me (not confused me though, since the rules are made by the people who most benefit from it).
  - nradov 2y ago
    That rather misses the point. The entire reason we have corporations is to abstract those issues away. For most routine business it's better to deal with a faceless corporation instead of trying to personalize everything. The corporation itself can be held accountable for contract compliance and in extreme cases you can get a court order to seize corporate assets; that's much easier than trying to seize and auction off the CEO's personal art collection or whatever.

Analemma_ 2y ago

Companies should not be allowed to have secret ownership; I don't give a shit if this data is leaked. Corporations are a legal fiction, and so they have no right to or expectation of privacy, like there should be for persons with e.g. individual tax records. The basic operation of markets depends on having as little information asymmetry as possible between opposite sides of a transaction, and part of that means knowing who you're doing business with to make informed decisions about the reputation of your counterparty.

deleted 2y ago
[deleted]
kylecordes 2y ago
Large publicly traded companies sometimes already have pseudo-secret/anonymous ownership, with most of the shares held by a giant mutual funds etc.
- Gormo 2y ago
  Large publicly traded companies are entirely exempted from this legislation.
Gormo 2y ago
You are of course free to decide whether or not to do business with an organization based on how well you know/trust the ownership, and decline do do business that are evasive about their ownership at your own prerogative. I'm not sure why ownership needs to be openly published in advance -- you can always query them confidentially through private correspondence -- or how having ownership compiled into a federal database that you don't have access to (unless you have corrupt influence over the relevant agency) will help you.

erellsworth 2y ago

> How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? I mean, I think the whole point of the act is to stop "rich people" from maintaining privacy/secrecy in regards to the businesses they own. And that's a good thing.

klyrs 2y ago
You seem to be under the impression that the Act will have its intended effect and that OC was bemoaning that. I read this as, "with the Act in place, how will its intent be subverted by those in power"
Gormo 2y ago
> I mean, I think the whole point of the act is to stop "rich people" from maintaining privacy/secrecy in regards to the businesses they own. No, the act has little effect on "rich people". It applies only to non-public firms with 20 or fewer employees, and exempts most firms in the banking and finance industries. It encumbers your local barbershop and the mom-and-pop restaurant on the corner, but the "rich people" get a pass. > And that's a good thing. It turns out that "rich people" have as much right to maintain the privacy of sensitive personal information as anyone else.

altruios 2y ago

Name a company that is legal to run that SHOULD have it's owner's identity hidden... Only those that dwell in darkness fear the light. Exposing who own these LLC's seems like a solid 'pro-truth' move for America.

toolz 2y ago
A company that specializes in helping people escape from horrible rulers would be an example. Not everything deserves to be public. There are always as many good reasons to hide as there are entities that need to be hidden from.
- newsclues 2y ago
  If a company that specializes in upsetting “rulers” their security shouldn’t be security through obscurity and it would be harder to trust than Former Spec Op Dudes Name Incorporated Because if you insist on privacy for the “helping people escape rulers” business the money laundering and criminals will suddenly be in that building!
  - ericd 2y ago
    As always, obscurity is one (often very helpful) layer of a multilayered defensive strategy. The meme that it's useless needs to go away. If you have a safe at home, you should probably hide its existence, because even if power tools couldn't reliably crack a safe (they can), there's always the $5 wrench strategy.
  - toolz 2y ago
    Criminals and launderers have never and will likely never need to incorporate. Sure, it's a tool they might use, but at best you'd take some of their margins away from them. Doesn't seem like a great trade to me, stealing some of the criminals profits in exchange for exposing the people who need privacy.
    - BLKNSLVR 2y ago
      Launderers are always incorporated. If they weren't, they wouldn't be able to launder.

CodeWriter23 2y ago

> How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? By hiring ex-CIA Agents having experience with setting up shell corporations after said act.

clamprecht 2y ago
Then I ask the same question you just sidestepped: how will the ex-CIA agents maintain privacy/secrecy after the Act?
- CodeWriter23 2y ago
  Ask them, I’m not a subject matter expert on such things. I can however infer they will have that capability because shell corporations are a fundamental building block of all their ops.

janalsncm 2y ago

> This database will eventually be hacked, leaked, shared with local law enforcement We could extend this argument to individual taxpayer info too. Have these things happened with taxpayer info, and does that mean the IRS shouldn’t get to know where you live?

hughesjj 2y ago
> Have these things happened with taxpayer info Actually, yes. Same with voter registration. Hell in WA state voter registration is public knowledge, along with whether you voted in any given election. Try it if you want it, but read the terms of service. Lots of "if you use this for advertising it's a felony" for anyone looking to grift https://www.sos.wa.gov/washington-voter-registration-database-extract https://www.sos.wa.gov/washington-voter-registration-databas...

jollyllama 2y ago

Doesn't it only apply to new filings? Aren't all the old entities grandfathered in?

PopAlongKid 2y ago
No. New entities have a 90-day window to file. Entities existing before 2024 must file no later by Jan 1 2025.

Gormo 2y ago

> The US government will soon have a database of all (complying) beneficial owners. This database will eventually be hacked, leaked, shared with local law enforcement (further allowing it to be leaked). The BOI requirements of the CTA were recently ruled unconstitutional (as exceeding federal commerce-clause power and encroaching on powers reserved to states) in the first major test case before a federal court. [1] Since it was ruled unconstitutional on reserved powers grounds, they didn't even reach the 4th amendment implications, but there may be further consideration as these cases make their way up the court heirarchy. It's definitely not certain that this database is going anywhere. > How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act? The same way they do now. The CTA as formulated was only binding on non-publicly-traded companies with 20 or fewer employees. It also explicitly exempted companies whose primary business activity is financial services or asset holdings. This is why many regard it as an attack on small business disguised as an accountability measure for big business. [1] https://www.thomsonreuters.com/en-us/posts/corporates/cta-unconstitutional-ruling/ https://www.thomsonreuters.com/en-us/posts/corporates/cta-un...

deleted 2y ago

[deleted]

nerdawson 2y ago

> This database will eventually be hacked, leaked, shared with local law enforcement (further allowing it to be leaked). In the UK, all of that information is freely available to anyone via Companies House.