The Corporate Transparency Act
The webinar was recorded March 3, 2021
Speakers: Jarrod Melson, Brett Melson
Moderator: Michael Bell
Transcript
Michael: My name is Michael Bell. I'm the president of Harvard Business Services, and I have Jarrod Melson and Brett Melson with me, and we're going to be talking about the Corporate Transparency Act.
A little bit about Harvard. We were founded in 1981. We just celebrated our 40th anniversary yesterday. We're family owned and operated, headquartered in Lewes. Have formed over 225,000 companies and have over 100,000 current clients worldwide. Delaware registered agent information specialists. We are not attorneys nor accountants. So what we tell you in this webinar is not to be taken as legal or accounting advice. And we have no affiliation with Harvard University.
With that being said, I'm going to turn it over to Jarrod. and he's going to take you guys through our webinar.
Jarrod: Good afternoon, everyone. Thank you for joining us. As Mike mentioned, I'm Jarrod Melson, the general counsel here at Harvard Business Services. I'm joined here by Brett Melson, our vice president of sales.
Brett: Hello, everyone.
Jarrod: As an initial matter, you're going to hear a lot about the Corporate Transparency Act for the coming years. And as an initial matter, what does it do? What is all the hubbub about? The Corporate Transparency Act is a sea change in business formation in the US. It requires, unless exempt, virtually all US LLCs and corporations, as well as certain non-US entities to report on a non public basis to the government, their shareholders, members or other equity holders, depending on what the entity is. They would have to file this not only on an initial basis, but also on an ongoing basis.
As you can imagine, this is what is driving the discussion around this act. This is a fundamental change for US business formation.
For instance, here in Delaware, very little beneficial owner information was required to be collected to form a company. In addition, even less was required to be passed through the state.
The government could get that sort of information through a warrant. But the Corporate Transparency Act represents an attempt to provide government with a shortcut in order to go after what it perceived to be bad actors within the system -- people who were using LLCs, corporations, in the United States to conduct criminal activities, everything from drug dealing to human trafficking. If you can think of it, it's said that they're doing it through these entities.
So an overview on the act itself. It became law on January 2nd, 2021. It was put into an annual defense appropriation bill. Now, this was a must-pass bill, meaning that to fund the military for the coming year, this bill had to be passed. The Corporate Transparency Act was made a part of this multi-thousand page act, so it almost snuck in under the radar. It passed simply because the broader bill, the National Defense Authorization Act, had to pass in order for our military and government to continue to operate.
Now, President Trump vetoed what you call the NDAA, the National Defense Authorization Act, but Congress was able to override the veto.
And so the Corporate Transparency Act became law.
Now it's been proposed, of course, in one form or another, with some varying terms and in varying forums for over a decade. There's been constant pressure on the states in the US to collect greater and greater amounts of information to bring the US in line with certain European jurisdictions and others.
Ultimately, rather than a state by state solution, which was slowly moving forward as the states required more and more information, the Corporate Transparency Act represents the final federal solution, a federal uniform solution that applies to all the states and the entities created under all 50 states, territories as well as tribal land.
The stated purpose is to prevent abuse of shell companies for criminal purposes. The thought was that these companies were being used, they were abusing the anonymity that was afforded to persons forming companies in the United States to conceal their ownership of these companies and to engage in all sorts of illicit activities.
There are documented examples of this, of course -- money laundering, terrorist financing, tax fraud, drug trafficking -- but as we're going to discuss here, a key question becomes, is this fundamental change in business formation a tailored response to the issue? Or is it overbroad?
There are roughly two million companies formed in the US every year that, absent an exemption, would be subject to this law. Is the law tailored such that it meets the goal with a limited amount of disruption, cost, lost time and just economic waste possible? I would argue, no. I would argue that the law is drastically overbroad. But we'll certainly see that as we discuss it.
One of the key features of the law is... You need to remember, it's not an effect yet. The Department of Treasury, which is responsible for the implementation of this law, has one year from its passage, one year from it becoming law, to issue regulations. Those regulations are going to define the various terms used in the law, which currently are very ambiguous. It's going to provide very necessary detail to fill in some of the holes in what isn't included in the Act. It could vary greatly, either expand or contract the scope of law, the number of companies subject to the law, and the information that needs to be reported.
Michael: So what you're saying, Jarrod, is -- nothing is set in stone right now. This can... Even though the Act has been passed, it can change, up until it goes into effect.
Jarrod: There's certain there's certain features that will stay the same that are put forward by the Act as benchmarks. But within those benchmarks, there's a lot of interpretive room to interpret certain terms.
For instance, interpreting the term "substantial control" in determining who's a beneficial owner. What does "substantial control" mean in this context?
For instance, what is beneficial ownership even mean in this context? Is someone an owner of shares if they own... Or of interest... If they own a membership interest in one series of a series of LLC?
Or is a series of a series of LLC a separate entity, for instance. They don't address that anywhere in this.
Will limited partnerships be included? Currently, it expressly only applies to LLCs and corporations.
It also says "and similar entities." But we really don't know what that might mean, whether it means limited partnerships.
And we'll discuss that here.
Again, it's framed as a federal solution for a perceived state law gap in information. It was thought that the industrialized world was outpacing us in information we would collect, and that the US was actually slipping into the status of a money laundering jurisdiction.
Whether that's true or not is up for debate. But that was at least a sense of a number of members of Congress, a large number of advocacy groups, and others.
For instance, in the text of the final bill, in the statement discussing its reasoning, it says -- most or all of the states do not require information about the beneficial owners of corporations, LLCs, or similar entities, formed under that state's laws.
That's not necessarily true. In all but less than 20 of the states, at present, some form of annual report was required for corporations and LLCs, which provided at least some of the beneficial owners and management persons that this law is now going to catch.
So perhaps it makes sense from an efficiency standpoint to have a federal solution as opposed to a state by state solution. But a federal solution is often overbroad by its very nature.
There was a lot of discussion of this Act, and a lot of support and a lot of opposition.
Many advocacy groups see this as filling a crucial hole in the US's criminal enforcement and civil enforcement, and simply enforcement of its tax laws.
The government certainly was in favor of it. But many business, legal and compliance groups opposed the act. For instance, the American Bar Association. You can find 36 different industry groups that joined a letter written by the National Federation of Independent Business, and many others. So a number of high profile groups were opposed to this Act, just as there were high profile groups and persons in favor of it.
Michael: And you can see why. Because it's a lot of having to keep history and making sure that these companies are keeping up with filing this information -- is it going to be filed with taxes? Or is it going to have its own due date? Is there going to be a fee to file this? -- and things of that nature. So there's a lot of unanswered questions here.
Brett: Really just brings a complexity into it. There's so many rules and regulations that must be followed already. This is really just one huge, overbearing type requirement that there's just a lot of confusion about. So I'm excited to see your thoughts on the matter.
Jarrod: That's true. There's so much left for the regulations to address.
We here at Harvard will be following this Act as we have before its passage, and providing further updates and webinars on its terms and such as it's being interpreted, as the regulations come out.
Brett: And about these regulations. We're not necessarily going to have specific answers to questions. There's a lot of confusion -- who's going to be? What's the definition of a beneficial owner?
Jarrod: Definitely. A lot of the very key terms are really... While there's some mile markers to determine sort of loosely what it might look like, the actual substance of the law is still very much up for grabs. And it will depend what the Treasury Department ultimately comes out with in its regulations.
With those regulations, the public will have an opportunity to comment on them, through what's called the "administrative law notice and comment process." Treasury will propose these regulations. There will be a period, 60 days to 90 days, perhaps, perhaps more, where the public can provide comments to these regulations. Those comments are addressed and reviewed, are often addressed specifically in the final adopting release, which adopts the final regulations. But there is still a lot of time for business input. There's a lot of time for people with an interest in this act to comment on it, both for or against, or for contracting or expanding its scope.
Michael: So what's the act stated purpose?
Jarrod: The stated purpose is to combat these shell companies. It's to combat these companies that have no legitimate business purpose, and act to conceal the identity of the people behind them, and then certainly to conceal their activities.
It allows, supposedly, in theory, and definitely in fact, but perhaps to a greater degree than Congress would want us to believe. It allows bad actors to get away with a great deal while remaining anonymous. And it is difficult to serve a warrant on these sorts of companies, particularly when you've got layers of entities owning other entities, often in offshore jurisdictions.
I don't know whether this act is actually going to catch any of that. Because the fundamental premise is that this is intended to capture criminals. Criminals don't accurately file reports. It's very easy for them to get around this in the filing process, particularly when there might be two million filers, simply by submitting what looks like but actually is not, accurate information.
In terms of the effective date, you might be asking -- when does this go into effect? When do I need to file this first report? Well, that's not even clear at this point.
The final effective date, when this will go into effect, is subject to the regulations. When the regulations are finalized, that is the date when this obligation will come into effect, as we'll discuss very soon, and when we discuss the timing of the report.
So, what are the next steps? What should the company be doing now?
Doing right what we're doing today -- discussing the terms of the Act. Begin reviewing the scope of the law as it stands. Determine whether your company is a reporting company. What reports you might have to make. Whether you qualify for an exemption.
And even if your ownership base is kind of static, perhaps start to trace through entity owners, looking at the scope of the law now, to make compliance later, perhaps far easier. And to inform comments for when the regulations come out. Where are the sticking points? Where are the real difficulties in implementing this reporting regime when companies are really looking at the nuts and bolts?
As I mentioned, we're going to continue issuing articles and providing insight. So continue looking at our blog and our webinars for future events where we discuss developments here.
We can get really into the nuts and bolts now. I have already said -- what does the Act require as the threshold -- it requires reporting that was not required before, of beneficial owners.
Generally, a subject company, a company subject to the Act must make an initial filing with FinCEN, which is a division of the Treasury Department, the Financial Crimes Enforcement Network.
When a company is formed, at the time of or in connection with its formation, or at the time of or in connection with its registration to do business with a state or tribal area in the case of a non-US entity.
We're going to talk about just who's covered by the Act next.
Brett: That brings a question into play. There's some ambiguity here. Right off the bat, we don't have a clear definition of when this must be filed.
You mentioned that it must be done in conjunction with the formation. However -- is this a 30 day filing? A 60 day filing? -- so that's something that we're really going to want to have clarification on. Especially for our industry and our clients, with these new companies.
Michael: And are they going to have to do it multiple times a year? If you change ownership in the middle of the year, as most companies do, are you going to have to refile this?
Brett: That's a great point. And then when do we have to refile it? If you've got an ownership change, when is that filing going to be required?
Jarrod: Currently, it simply says... I believe the exact language is -- contemporaneously with formation, at the time of formation, or concurrently.
And then in addition to this, an amendment filing. You have to file, within one year, anytime you're beneficial ownership changes.
But this could result in a lot of filings. If you're beneficial ownership changes twice a month and you're making filings. Who knows how long we'll have. The regulations will tell you how long you have to actually submit the filing and prepare it as of when, as of the date of the transfer, as of the settlement date.
But fundamentally, the question is -- are you going to have to file 20 reports if you're beneficial ownership changes 20 times in a given year?
Currently, it would look like yes. But again, I believe the regulations are going to try to find ways to streamline this reporting.
So, for instance, if a reporting company has three other reporting companies as its beneficial owners, you may simply be able to cross reference those three owners' own filings in filling out the applicable entity filings -- a way to simply cross reference or incorporate by reference, other entities.
Brett: We hear this term quite often -- beneficial owner. I know we're going to be getting to that.
But I know people right off the bat might just have questions about -- what are you referring to as a Beneficial Owner?
Jarrod: Beneficial owner, in a general sense, refers to the real power to dispose of or make decisions with respect to shares or interests.
It's not someone that's, for instance, a broker holding shares in a street name, in the company's name that he works for. Street name is not beneficial ownership, often. It's the underlying owner, or whoever has the proper authority. But generally, it means getting down to the natural person, the individual, that actually receives the benefit and has control over the shares or membership interests.
So a company who is subject to this Act will have to look through various levels of intermediate entities that may hold its interests or shares.
Brett: What you're referring to there, when you say intermediate entities, you're talking about an LLC that may have another entity, which is the member of that... Which may in turn, may have another entity that's the owner.
That's where the ambiguity and the complexity comes into play.
Jarrod: And that's one of the key things that will be handled in the regulations. Beneficial Ownership is a fairly common concept in US securities law. But it's one that is subject to a lot of different tweaked definitions, a lot of definitions that just work in different ways, and a lot of really bad definitions that seek to trace through these entities to find the actual person that benefits from and truly could be said to hold these shares or interests.
Michael: Yeah, so we're not sure if it's going to be someone who has 25% of the company or more, or if it's 50% or more. It's a vast...
Brett: Think about it this way. From what I've read initially, it's one that owns 25% or more.
Michael: That's what I've heard. Majority ownership is 25% or more. Then you have to report K1's and things of that nature. But that's all well beyond my scope of expertise. But that's just what I've heard. And but we'll just have to see what they come out with.
Jarrod: And what happens, for instance, if a natural person owns 55% of an LLC, which then owns 26% of the company that you're looking at with the filing?
Technically, that person has beneficial ownership over less than 25%, but it has beneficial ownership over a company with beneficial ownership of more than 25%. So that's how complex this is going to get.
Let's switch briefly to what companies are subject to the Act? Who has to worry about this?
The definition of a subject company is extremely broad, but there are a number of exceptions which carve out a number of companies from reporting, but not necessarily the ones one would think are logical or would expect.
Who is subject to the Act? LLCs, corporations and similar entities formed under the laws of a US state or tribal area, or non US entities registered to do business in a US state or tribal area.
So even non-US entities, say, for instance, who are registered to do business in California or New York -- and this is very common, as you know -- would be subject to these rules.
You wonder, are non-US persons and entities who may want to avoid being on the radar of, say, the IRS or other US regulators -- for perfectly legitimate purposes -- going to be as willing to register to do business and actually do business in some US states?
This is going to apply to them just as onerously, and you wonder, are beneficial owners of these non-US entities, who may be two or three times reserved through intermediate holding entities, are they going to want to be subject to this requirement? And what's it going to do to sort of the cross-border trade, cross border formation of entities? Subsidiaries? It's going to be interesting.
The scope is subject to exceptions. The biggest one, to my mind, is the large entity exception.
This Act is targeted at small companies. It's targeted at those that might be shell companies, the characteristics of companies that could be shell companies.
I would argue that the definition is far overbroad. The large entity exception says that a company is not subject to reporting if it has more than 20 full time employees in the US. It's filed in the previous year tax returns that show five million or more in gross receipts or sales in the aggregate. That's including other entities owned by the entity at issue or other entities through which the entity itself operates. And the large entity has to have a physical office in the United States. So, 20 full time employees in the US, five million in gross receipts or sales in the previous year, filed with the IRS, and it has a physical office in the US.
This exemption is going to be heavily subject to interpretation and explanation by the Treasury regulations.
But this is a big one. I mean, this carves out a lot of larger companies and leaves the burden on companies that are small, that are start ups, and that really are the least able to handle this kind of burden. They'll have to hire an attorney to actually trace through this kind of beneficial owner definition. And really all entities that are newly formed that are not subject to the next exemption, which talks about specific kind of regulated companies, are going to be subject to the Act. Pretty much any entity formed is not going to have more than 20 full time employees in the US at the time of its formation, five million in gross receipts in the past year, because it didn't exist, and a physical office in the US, which may or may not apply.
Brett: So they would have to meet all three of those characteristics. Not just one.
Jarrod: That's right. To qualify.
Brett: So for instance. If they had just 20 full time employees but didn't meet the other... Interesting.
Jarrod: That's right. They're still subject. Subject to reporting.
This will be filled in quite a bit by the regulations.
Brett: Is there are time, period, you expect to go ahead and have clarification? Or some of these answers filled in?
Jarrod: It does have to be at least the issued regulations, the proposed regulations, that are subject to comment by the public, have to be issued one year after the passage of this Act. So the Act passed on January 2nd. However, I have seen very large law firms, accounting firms, quoting different days saying December 31st, 2020, January 1st, 2021, or January 2nd, 2022. Somewhere in those three days.
But I've seen major law firms disagreeing on that point, or at least not knowing quite specifically how that works, because the Act is vague, fundamentally.
Michael: So is this Act to try and prevent these new businesses from getting to a certain point?
Jarrod: It's intended to hit those businesses that are really never going to become legitimate operating businesses, where they might have, let's say, three owners in the US or some overseas, and those people are trafficking women from Europe, let's say, or they're shipping heroin from Afghanistan. It's meant to hit those kinds of companies, which is why I think it's so overbroad.
I believe I read there's two million companies a year formed. They're they're putting an initial burden on two million companies that are being formed, in order to catch some very small, let's say 1% to less than 1% of companies that are formed in the US for the purposes of crime, tax evasion, concealment.
Fundamentally, that's not who you're hitting with this burden. You're hitting everybody from the plumber that decides he's going to form a new plumbing business to someone with a really fascinating idea that wants to start a company or even just an Amazon seller.
Brett: That right there is a huge portion of all new formations. It's not going to be a lot of companies that are going to have 20 plus employees. Primarily it's the small guys, the plumbers, the Amazon resellers. How many different holding vehicles are we forming? LLCs? You hold an asset. So it's a big net they're casting, here.
Jarrod: There are going to be ways that they try to address those holding entities and who is subject to reporting. For instance, if all of your beneficial owners are themselves subject to reporting, it looks as though you won't have to report. You'll just have to make a report that references those other companies by their file number. Because each company, also, as we're going to discuss, is going to get a new filing number they're going to have to apply for from FinCEN, with a new reporting system.
Brett: This is FinCEN file number.
Jarrod: FinCEN is going to give everyone a unique numeric identifier. So in connection with the formation of a company, companies like ours are likely going to seek these numbers, these identifying numbers, and have to then make the filing in connection with the formation. So there's one more step.
Brett: So it's a completely different bureaucracy than obtaining the tax ID number, the EIN, from the IRS.
Michael: Going to have to obtain this FinCEN number after they get their EIN number, essentially.
Jarrod: Most likely. It's difficult to say. They haven't said whether or not they would issue that at the same time, for instance, and that's Treasury Department filing as opposed to IRS. They could have a whole separate system. They're going to have a whole separate filing system. And we know how well, the government deals with constructing entire technological platforms in the span of less than a year -- I mean, that's going to go well.
It sounds like a small thing. But as you gentlemen especially know, it could be very burdensome to have to go and get that, an extra step. And one of the benefits of forming in the US is speed to market -- you're able to get that entity up and running. And this is another roadblock in speed to market, where people are going to have to take additional time, and give up additional privacy rights to operate a company in the United States.
Michael: What about these small companies that have already been around that make less than five million a year, and have been in business for 5 or 10 years? Do they have to do this too?
Jarrod: They are going to have an obligation the same as any other company, except at the outset. At the outset, existing companies that exist at the time Treasury regulations become effective, at the time the law goes into effect, if they were in existence before that, they have to file their report within two years, their initial report within two years, and then after that, just like everyone else that's formed after that date, you have to file corrective amendment filings.
So really, not just new companies going forward, but virtually every company in existence that doesn't fall within the large company exception -- or the next exemption I'm going to speak about -- are going to be subject to this. It's a massive number. It's millions of companies.
Michael: Okay, so let's look at the entities that are kind of subject to extensive regulation here.
We know that banks are heavily regulated and all of that. We know that federal state credit unions are. We know that investment companies under the Investment Company Act of 1940 along with Investment Advisors, a broker...
A nonprofit is kind of an interesting conversation. We did have one person who provided us a question on nonprofits of -- how will this impact not-for-profit organizations?
Jarrod: It's very interesting. Because is a not-for-profit one of those? Are there times in which a not-for-profit entity may be subject to the Act. It looks like they would not.
If they're described 501(c) -- 501(c)(3), of course, is the largest nonprofit category. But things like charities, church groups, investment clubs, any of these could be nonprofits that would be excluded.
But the Internal Revenue Code is so complex that I have no doubt there are a number of entities that may be nonprofits, so that maybe tax exempt, that are going to have to report, until they carve them out.
These entities here, the ones that you just named, are subject to extensive regulation and reporting already. So they figured -- these aren't the kinds of companies that are going to become shell companies that engage in prostitution and stuff.
A mutual fund is just not in a place to file with the SEC, and then also be about modern day slaves.
These are already subject to a comprehensive reporting scheme, so they take them out of reporting under this Act. And again, if your beneficial owners are all themselves exempt entities, you are exempt from the reporting.
Interestingly, though, if you're exempt from reporting, you still have to make a filing that says why you're exempt, as an initial matter.
So if you're a bank or a large reporter, you have to make a filing which says -- I'm a large reporting entity, I do not have to file.
From there, I believe you're done. Unless the regulations say otherwise in the future.
Brett: Unless you slip into where you're no longer considered a large [inaudible]
Jarrod: You have to make a filing. If you become exempt and then you have to begin to file if you were exempt and are no longer.
Michael: So no matter what the circumstance is, you're probably going to have to file something.
Jarrod: At least at least once, you're going to have to get your hands into this system.
And then the question becomes -- what persons must be reported? Who has to be spoken of in these reports?
Beneficial Owners are the word that they use. And we've talked about that.
Now, here, it implies two things, and they're not necessarily intuitive. One is someone that owns 25% or more of the equity interests of the subject company -- so an LLC, shares of a corporation. The easiest example is a natural person directly in his or her own name holds shares of a corporation that's subject to reporting.
Brett: That brings up a good point. So, for instance, a married couple, each owning 13%. Would they consider that as one individual? Will they come out with clarification there?
Jarrod: They likely would. In a lot of places in the securities laws, they do treat married couples or spousal equivalents -- I'm not sure spousal equivalents will apply, given the Supreme Court's ruling on broad marriage rights for gay and lesbian individuals -- but spousal equivalents, which itself is a problematic definition, are usually treated as one holder.
But there's other questions in the same way. For instance, what if members of a single family as part of a family office investment, five people hold shares. Are they one unit? Are they part of a... It's likely they would be. But it depends again what the regulations say.
In addition to the 25% owner, there's also have to be reported anyone who exercises substantial control over the subject company.
This would be your directors, your officers, C-level officers, for the most part. Directors, C-level officers, maybe the manager an LLC, a managing member.
Brett: So even if though they don't necessarily have the beneficial ownership, since they are deemed the manager of that LLC, or even just out of the director of a corp, that information is reported as well. So this is well beyond even beneficial owners.
Jarrod: Yeah. They technically call these people "beneficial owners." And interestingly, it is not just by title. It's any arrangement, understanding, contract, course of practice, that gives the person substantial control.
So you have to look not just, say, the terms of a contract. But you have to look at the actual on-the-ground situation, what's going on. Does someone with 15% nevertheless, as a founder of a company, still make the decisions, effectively? They would have to be included, even though it's an understanding that's not written. It's just an arrangement that gives them substantial control, even if it's not contractual or title based.
There's certain times that people can be excluded. Beneficial owners exclude certain persons that I talked about here -- a minor child, a parent or guardian is reported. An individual acting as a nominee or custodian. So, for instance, a bank holding shares in custody for someone, for a brokerage account, they are not considered a beneficial owner. The individual whose interest is through right of inheritance. So, for instance, if they are a beneficiary of a trust that holds the company, they don't necessarily become a beneficial owner simply because of the inheritance rights that when the person, say the grand tour dies, the business goes to the beneficiaries. That alone isn't enough at that point. Or even a creditor of a reporting person, unless the creditor would otherwise be a beneficial owner. So let's say somebody has a charging order out against a member of an LLC. They're able to step into that person shoes and get the distributions that that member would otherwise be entitled to. That creditor is not treated as a beneficial owner unless the creditor otherwise would be a beneficial owner.
So you can see there's some exclusions. But it's going to be a very difficult process for Treasury to put out a definition of beneficial owner that's going to please anyone. And maybe that's the goal, is to please no one and therefore sort of split the baby. But, it's going to be a lot of discussion around, particularly given the stakes, given the large economic and the large broad stakes of reporting here, and even more than the economic rights are simply the loss of privacy rights. This is going to be a real fight over beneficial ownership in the definition.
Now then the question becomes, what must be reported about someone? Let's say we determine a person's the beneficial owner. What has to be reported?
Full legal name, date of birth, current residential or business address, and a unique identifying number from one of a certain number of types of identification. For instance, the US passport number, perhaps the US Driver's License number, a non-US Passport number may work in many cases, a non-US ID card may work depending on the content and depending upon whether it's government endorsed.
Or simply a FinCEN identifier -- companies will be getting these identifiers, and that will be the identifying number for an entity.
But again, you have to look through an entity to the ultimate beneficial owner of the person. So -- an LLC owns your LLC. You have to look through that intermediate LLC to find the ultimate beneficial owner of the company being examined at issue.
Brett: Now, I do have a question there, Jarrod. You mentioned that it's an identifying number, a passport, a government ID. Now, are you going to be required to actually submit that type of ID? Whether it's an ID from an individual from another country? Are you going to be required to submit accompanying documents?
Jarrod: Yes. Well, you know, I'm not certain whether you'll actually have to be required to submit, say, a copy of the ID or just the number itself that allows the government then to look up the person holding that ID. That's the goal, is to capture an identification that a US government agency -- or non-US government agency that's able to have access to this information as we discuss next -- can they then attribute with confidence that identifier to that person? That's really the touchstone.
So then we talk about, how can the filed information be used? And this is really a key crux. Because if you're forced to give up this information, at least you can take comfort in the fact that it's not public. It is not a publicly reported database. It is not open to the public. It's intended to be particularly secure.
Information security is a huge concern here. I think the government tried to give some level of cold
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