PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

“Corporate Transparency Act” Targets Small Businesses

By at 21 October, 2019, 7:44 pm

by Karen Kerrigan-

This week, the U.S. House is expected to act on legislation that is very harmful for small businesses.

“The Corporate Transparency Act” (H.R. 2513) sounds nice, but it directly targets the smallest of businesses by requiring they file redundant information about “beneficial owners.”  As noted by the Congressional Budget Office (CBO):

“The bill also would require corporations or LLCs formed under state or tribal laws to report the identity of beneficial owners to FinCEN and to annually update that information. CBO anticipates the bill would generate approximately 25 million to 30 million new filings each year. Because of the high volume of businesses that must meet the new reporting requirements and the additional administrative burden to file a new report, CBO estimates that the total costs to comply with the mandate would be substantial.”

Failure to file completed and updated forms could trigger criminal or civil penalties that include imprisonment for up to 3 years, $10,000 in fines, or both. The database of information will be readily available to law enforcement without a court order or subpoena.

What could possibly go wrong?

SBE Council opposes bad guys, financial crimes and illegal activity, but this approach (which the bad guys will easily work around) is heavy-handed to say the least. We have joined our small business allies in opposition to the legislation.

Read the letter to all U.S. House members here and call your U.S. House member at 202-224-3121 and urge them to oppose this burdensome and misdirected legislation.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

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