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Saturday, January 19, 2019

U.S. Govt. Shutdown--Books, Records & Corporate Filings

By Cory Roberson, Principal of FIN Compliance and FIN Community 
By David McNeal, Contributor of My Compliance Blog 

Jan 25th Update (since time of this publication): President Trump signed a bill to pause the shutdown for 3-weeks.  SEC filing systems remained open during last shutdown.  

January 19, 2019.  In an unprecedented fashion, the government shutdown is undoubtedly creating a backlog of administrative delays for the Securities & Exchange Commission and its federal counterparts. 

This article summarizes an investment advisors’ general requirements during this period, which includes: record keeping, registration filings, financials, and/or corporate filing documentation.  This summary does not address all the potential regulatory obligations for firms, but it aims to shed light on the most common errors we see amongst the RIAs we work with.

2019 Government Shutdown/Filings (Update)

Officials providing shutdown guidance as it relates to the SEC’s Investment Adviser Registration Depository, or IARD, say the system “is operated pursuant to its contract and thus will remain fully functional and will continue to accept filings as long as funding for the contractor remains available through permitted means,” said in a notice posted by personnel with the SEC Division of Investment Management.

“Firms still can and should make all required filings (ADV or otherwise) with the SEC,” - Gail Bernstein, the Investment Adviser Association’s general counsel, told Think Advisor in an article published on 1/2/2019.

In his response to the SEC’s operations shutdown plan, Mr. Bernstein expressed, “I believe that all statutory and regulatory deadlines must be kept by [SEC] registrants (or applicants).”

As registered investment advisors continue to adhere to their Form ADV filing obligations during the government shutdown, the agency’s other divisions will be unable to conduct business as usual.

Corporate/Tax Filings with the State

All firms must file its business documents in the state or county where it conducts activities.  These activities can be based on: (1) the type of business, (2) whether the firm holds an office in a particular jurisdiction, and/or (3) those who receive compensation in a location. 

Filings also vary by business type.  For example, a sole proprietorship or “independent contractor” may be required to file for a: (1) business license or (2) “Doing Business As” (DBA) in the county where its activities are located.

A Limited Liability Corporation (LLC), Sub-Chapter S  (S-Corp), or Incorporation (C-Corp) is a bit more complex.  In these situations, a business may need a combination of: (1) Corporate filings; (2) Business Licenses, (3) Articles of Incorporation, and more at the state level.   

All firms operating in a “other business name” may need to file a DBA at the county level.

Federal corporate filings (tax exemptions--501(c)3 and other IRS entities) are still delayed due to backup from the past government shutdown.

Where to File Corporate documents (applies to all business types)

Most business documents are available on the websites of the state or county jurisdictions where the firm conducts its operations.  All business types can either mail, fax, or complete filing forms online.  Some documents may require an annual renewal fee or tax.  

Corporations, contractors, and certain investment fund types carry additional tax/audit documentation to be filed with various parties - contact a tax/audit professional to discuss your filing needs.  

Lastly, maintaining corporate documents is important as its your firm’s first line of proof for operating a legal business at the state tax/corporate level.  In addition, SEC and state securities regulators may check your firm’s corporate documents to ensure that each advisor is addressing its initial requirements for conducting business.  Note: We are compiling a corporate filing resource for our paid users of RIA Review, our compliance management system.

Disclaimer:  We are not corporate or tax filing professionals.  We advise you to contact a local professional to fully understand your corporate, tax, and licensing obligations for your business. 

SEC Fiscal Year-end Filings

Firms who do not have a 12/31 fiscal year-end should remember to adjust the filing dates on their calendars to match its actual calendar year-end date. 

Any issuer that fails to file a notice as provided by the rule of the commissioner shall, within 15 business days after discovery of the failure, file notice on or after demand by the commissioner, whichever occurs first, and pay the commissioner a fee equal to the transaction qualified under Section 25110.

Form ADV Filing

Form ADV is filed annually by every adviser, no later than 90 days after the end of its fiscal year, to amend its registration or general reporting obligations.   It is also required to promptly file its material changes within 30 days of said activity.  See Rule 204-1 of Investment Advisors Act.

Documents are filed either with the Investment Adviser Registration Depository (“IARD”), the Central Registration Depository (“CRD”) or the State Securities Administrators.

Form ADV is used to: 

Register with the Securities and Exchange Commission;
Register with one or more state securities authorities;
Report to one or more state securities authorities as an exempt reporting adviser;
Report to the SEC as an exempt reporting adviser;
Submit a final report as an exempt reporting adviser;
Amend the reports;
Amend the registrations;

Other State-Specific Corporate Filings

While most RIA firms are familiar with the Form ADV filing requirements, we observed that some firms are less familiar with the additional requirements regarding corporate filings and records.

For example: If you are an RIA, who is also a California LLC corporation, the offer and sale of securities in your corporation must be qualified, unless exempt, pursuant to California Corporations Code (“Code”) Section 25110.

If exempt, the firm must file an appropriate limited offering exemption notice (“LOEN”) pursuant to Code Section 25102(f).

If the authority to offer and sell the securities is exempt, please file LOEN and pay the applicable fee electronically via DBO Self-Service Portal DocuNet.

General Books/Records requirements (Rule 204-2)

Sections 203 and 204 of the Advisers Act [15 U.S.C. §§ 80b-3 and 80b-4] authorize the SEC to collect the information required by Form ADV. The SEC collects the information for regulatory purposes, such as deciding whether to grant registration.  The SEC maintains the information submitted on this form and makes it publicly available.

Under Rule 204-2, and similar state rules, every investment adviser registered or required to be registered shall make and keep true, accurate and current books and records relating to its investment advisory business.   Filing a Form ADV is a part of these general requirements for advisers.

Additional Resources

The SEC provides information about its rules, filings, fees, and the Advisers Act on its website:

NASAA provides information about state investment adviser laws and its rules, and how to contact a securities authority on its website:

FINRA provides information about the IARD and electronic filing system on its website:

Compliance and Business Management

FIN Compliance ( is a consortium of compliance services including: RIA Consults-Roberson Consults Group, a compliance consulting firm, RIA Review, a compliance-management software tool (SaaS), B-D Review, a RIA/Broker-Dealer compliance management software tool, and FINLancer is a business management portal featuring:  E-signature tools; Invoicing integration, Vendor Directory, continuity directory*, business client document portal, and more (available by Q3 2019).  Access all services on one site:


FIN Missions ( provides business support group sessions for other entrepreneurs.  In addition, Cory has volunteered for more than fifteen youth programs in locations such as like S. Korea, China, S. Africa, Thailand, and India.

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