Last Update :10/28/2019

House Passes the Corporate Transparency Act of 2019

House Passes the Corporate Transparency Act of 2019!!

Golf Club and Course Owners,

Is your golf business established as a corporation or limited liability company? Do you employ more than 20 full-time employees? Are your gross receipts or sales greater than $500,000? If you answered yes to these three questions then the Corporate Transparency Act of 2019 will require your attention!

On Oct. 22, the U.S. House passed the Corporate Transparency Act of 2019. The purpose of the Act is to ensure that persons who form corporations or limited liability companies in the United States disclose the beneficial owners of those corporations or limited liability companies, in order to prevent wrongdoers from exploiting U.S. corporations and limited liability companies for criminal gain; to assist law enforcement in detecting, preventing and punishing terrorism, money laundering and other misconduct involving U.S. corporations and limited liability companies, and for other purposes.

Reporting requirements for existing beneficial owners and each applicant proposing to form a corporation or limited liability company under the laws of a State or Indian Tribe shall file a report with FinCEN containing a list of the beneficial owners of the corporation or limited liability company that include;

1. Full legal name;
2. Date of birth;
3. Current residential or business street address; and 
4. A unique identifying number from a non-expired passport issued by the United States, a non-expired personal identification card, or a non-expired driver's license issued by a State; and 
5. If the applicant is not a beneficial owner, it must also provide the identification information described in the clause relating to such an applicant.

It models the Senate's bill S. 1889, the Title Act. Like the Title Act, the House version requires reporting by businesses that employ more than 20 full-time employees, annual gross receipts of greater than $5,000,000, and the business is physically located within the United States to report annually a list of all beneficial owners or partners. Smaller businesses along with 501(c) non-profit entities are exempt from the reporting requirements.

The penalties for willfully failing to meet reporting requirements are lower. The House version limits civil penalty of not more than $10,000 and imprisoned for not more than 3 years or both whereas the Senate version just states civil penalties up to $1 million and criminal penalties of up to 3 years in prison.

As we previously reported, NGCOA is opposed to this legislation as it is currently written. We recognize the intent is to prevent unlawful business activity by using small business enterprises. However, like so many of our laws, the burden is placed on legitimate businesses. We feel the bill will impose reporting requirements on golf course owners while eroding our privacy rights.

As we previously requested -

If this bill affects your business we encourage you to reach out to your Senator, especially those on the Judicial Committee (listed below).  Here is a sample message you are welcomed to use or create your own message:

As a constituent and small business owner, I write to you in strong opposition to S. 1889, the TITLE Act. I am concerned this bill will impose significant new reporting burdens on my business while simultaneously eroding my right to privacy. 

Under this legislation, every S corporation and nearly every business with 20 or more employees and annual gross receipts of $5,000,000 would be required to file new and periodic reports with individual states, which includes: existing businesses within 2 years of database establishment, new businesses at incorporation, every business within 60 days of any changes in ownership, and every business annually. 

Failure to comply with this legislation would be a federal crime with civil penalties up to $1 million and criminal penalties of up to 3 years in prison.

Whereas large businesses and financial institutions may have access to teams of lawyers, accountants, and compliance experts to gather beneficial ownership information and report it to the government, small business owners do not. Small business owners cannot afford accounting and legal experts to help them understand and comply with the new federal reporting requirements.

I strongly urge you to oppose S. 1889, the TITLE Act.

Below is a list of members on the Senate Judiciary Committee. Hopefully, through your efforts, this bill will die in committee!

Questions should be directed to Ronnie Miles, rmiles@ngoa.org

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Ronnie Miles
Director of Advocacy
NGCOA
Daniel Island SC
[843-471-2714]
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