The Federal Corporate Transparency Act - Waiting for Answers

Abstract

The federal Corporate Transparency Act, adopted on January 1, 2021 over President Trump's veto, is the product of two decades of proposed federal legislation to combat money-laundering and terrorist financing through anonymous business organizations. When rules are finalized, newly-formed and existing business entities will have to file reports with the Department of the Treasury's Financial Crimes Enforcement Network identifying control persons and beneficial owners of more than 25% of the entity.

Unfortunately, and despite the very long gestation period for the Corporate Transparency Act, the act itself raises a large number of questions for which we are awaiting answers. Hopefully the answers will come in rulemaking which must be completed by December 31, 2021. This paper describes a number of the questions for which we are awaiting answers.

Keywords: business transparency, business formation, Corporate Transparency Act, Geographic Targeting Orders, ethical obligations

JEL Classification: k00, k22, K42