Should companies have to report all beneficial owners to the government?
Bill Summary
This bill aims to reduce corruption and exploitation and help law enforcement by requiring people who form corporations or limited liability companies to disclose all beneficial owners of the corporation or company.
Sponsor: Rep. Carolyn Maloney (Democrat, New York, District 12)
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Opponents say
• “What is perhaps most perplexing about the Corporate Transparency Act is that it targets small businesses by explicitly excluding businesses that have over 20 employees and more than $5 million in gross receipts or sales. The bill would create paperwork burdens for these small businesses that will be required to comply with the mandates of the bill.” - Adam Brandon, President of Freedomworks
• “The bill would impose a criminal penalty of up to three years of imprisonment for conduct that is essentially a paperwork violation—even for a first-time offender. Given the bill’s broad reach and vague definitions, the provision could result in the conviction of individuals who have no intent to violate the law, whose greatest offense may simply be not understanding complicated and vague financial rules, and whose conduct causes no social harm.” - The National Association of Criminal Defense Lawyers (NACDL) and American Civil Liberties Union (ACLU)
• “The bill would impose a criminal penalty of up to three years of imprisonment for conduct that is essentially a paperwork violation—even for a first-time offender. Given the bill’s broad reach and vague definitions, the provision could result in the conviction of individuals who have no intent to violate the law, whose greatest offense may simply be not understanding complicated and vague financial rules, and whose conduct causes no social harm.” - The National Association of Criminal Defense Lawyers (NACDL) and American Civil Liberties Union (ACLU)
Proponents say
• “It is absurd that the US allows criminals to launder their money here. We’re the only advanced country in the world that doesn’t already require disclosure of beneficial ownership information and my Corporate Transparency Act will change that… Anonymous shell companies have become the preferred vehicle for money launderers, criminal organizations, and terrorist groups and we’re letting these bad actors get away with criminal actions even though law enforcement has asked us to fix this gaping hole in our criminal code.”- Rep. Carolyn Maloney (Democrat, New York, District 12)
• “Criminals are taking advantage of state laws by establishing firms – often without a physical presence or business activity – to access our banking system… The Corporate Transparency Act targets this problem by requiring a company that has the characteristics of a shell corporation to disclose who benefits from the company’s operations and makes that information available only to law enforcement. This simple requirement would enable law enforcement to stop money from flowing across our borders to terrorist organizations” -Rep. Peter King (Republican, New York, District 2)
• “For too long, we’ve allowed dictators and kleptocrats to hide their stolen wealth in shell companies and real estate on American soil… Our lax rules have enabled these corrupt foreign actors to escape accountability and even to buy political influence in our country. Requiring companies to disclose their beneficial ownership is one of the strongest steps we can take to advance democracy abroad and protect it at home” - Rep.Tom Malinowski (Democrat, New Jersey, District 7)
• “Criminals are taking advantage of state laws by establishing firms – often without a physical presence or business activity – to access our banking system… The Corporate Transparency Act targets this problem by requiring a company that has the characteristics of a shell corporation to disclose who benefits from the company’s operations and makes that information available only to law enforcement. This simple requirement would enable law enforcement to stop money from flowing across our borders to terrorist organizations” -Rep. Peter King (Republican, New York, District 2)
• “For too long, we’ve allowed dictators and kleptocrats to hide their stolen wealth in shell companies and real estate on American soil… Our lax rules have enabled these corrupt foreign actors to escape accountability and even to buy political influence in our country. Requiring companies to disclose their beneficial ownership is one of the strongest steps we can take to advance democracy abroad and protect it at home” - Rep.Tom Malinowski (Democrat, New Jersey, District 7)
- Reps Maloney, King, and Malinowski Introduce Bipartisan Corporate Transparency Act (Press Release)
- CBO Cost Estimate H.R. 2513 (Congressional Budget Office)
- Opinion: The Corporate Transparency Act Will Harm Small Businesses (Wall Street Journal)
- Is This the End of Anonymous Shell Companies? Not So Fast (New York Times)
- The National Association of Criminal Defense Lawyers (NACDL) and American Civil Liberties Union (ACLU) Letter
