There is much uncertainty around compliance with the Corporate Transparency Act, passed by Congress in January 2021 under the Biden Administration. This past Sunday, the Treasury Department announced the new proposed rules. The law required companies to report their beneficial ownership to FinCen to combat money laundering, illicit shell companies, and terrorism. Certain businesses were to submit information such as beneficiary names, date of birth, and addresses of beneficial owners, with a controlling interest of 25%.
The new reporting rule would affect only foreign reporting companies. A foreign company is defined as one formed in another country but registered to do business in the United States. If the Treasury Department follows these new guidelines, most companies won’t have to report on beneficial ownership. Treasury also announced it would enforce no penalties or fines against US citizens or companies after the rule takes effect, which was considered by many a disaster for small businesses. Close to a million companies have complied with the law. Stay tuned for the next iteration!
