{"bills":[{"photos":{"featured":"https://assets.causes.com/bill/photo/hr2513-116/featured_corporate-transparency-act-of-2019-1572004920.jpg","featured_large":"https://assets.causes.com/bill/photo/hr2513-116/featured_large_corporate-transparency-act-of-2019-1572004920.jpg","shareable":"https://n.causes.com/share-images/bills/hr2513-116.png"},"introduced_on":"2019-05-03","title_override":"Should Companies Have to Disclose Their ‘Beneficial Owners’ at Formation to Deter the Use of Shell Companies?","summary_override":"

This bill — the Corporate Transparency Act of 2019 — seeks to crack down on money laundering in the U.S. through anonymous shell companies. It would require companies to disclose their true, beneficial owners at the time the company is formed to prevent bad actors from using anonymous shell companies to thwart law enforcement and hide their illicit activities.

“Beneficial owners” would be defined as natural persons who directly or indirectly express substantial control over a corporation or LLC, own 25% or more of a corporation’s or LLC’s equity interests, or receive substantial economic benefits from a corporation’s or LLC’s assets. Minor children, nominees, intermediaries, custodians, agents, persons acting solely as employees of the company or LLC and whose control derives solely from their employment status, persons whose only interest in a company or LLC is through a right of inheritance, and creditors would be exempt from this definition.

Under this bill, minimal disclosure requirements would include:

Beneficial owners’ names;
Beneficial owners’ dates of birth;
Beneficial owners’ current addresses; and
Beneficial owners’ driver’s license or non-expired passport numbers.

Additionally, this bill would require companies to annually file lists of all their current beneficial owners and any ownership changes over the previous year.

FinCEN would be responsible for collecting beneficial ownership information and compiling it into a database. Information from the database could be made available through requests.

Those who submit fraudulent or false ownership information could be subject to civil and criminal penalties. These would include imprisonment for up to three years and/or civil penalties up to $10,000.

U.S. companies that employ more than 20 workers and have more than $5 million in gross receipts or sales would be exempt from this bill’s mandates. Certain financial institutions which are federally regulated elsewhere (such as banks, credit unions, and investment companies) are also exempt. Non-profits would also be exempt.

","official_title":"To ensure that persons who form corporations or limited liability companies in the United States disclose the beneficial owners of those corporations or limited liability companies, in order to prevent wrongdoers from exploiting United States corporations and limited liability companies for criminal gain, to assist law enforcement in detecting, preventing, and punishing terrorism, money laundering, and other misconduct involving United States corporations and limited liability companies, and for other purposes.","short_title":"Corporate Transparency Act of 2019","popular_title":null,"short_summary":"Corporate Transparency Act of 2019 This bill requires certain new and existing small corporations and limited liability companies to disclose information about their beneficial owners. A beneficial owner is an individual who (1) exercises substantial control over a corporation or limited liability company, (2) owns 25% or more of the interest in a corporation or limited liability company, or (3) receives substantial economic benefits from the assets of a corporation or limited liability com...","summarized":true,"cost":132000000,"cost_commentary":"The CBO estimates that implementing this bill would cost $132 million over the 2019-2024 period.","impact":"LLCs; anonymous shell companies; disclosure of companies’ beneficial owners; illicit money in the U.S. financial system; and FinCEN.","argument_for":"The opaque nature of American LLCs allows illicit money to enter the U.S. financial system and real estate market. These dirty funds can then fund international crime, terrorism, and more. Requiring companies to disclose their beneficial ownership will help fight money laundering and help law enforcement investigate and prosecute financial crimes, and won’t be an onerous burden that deters law-abiding people from founding new LLCs.","argument_against":"Existing regulations and rules already provide enough information on companies’ beneficial ownership. This bill would impose duplicative burdensome reporting requirements that’ll hurt those who can least afford to comply with them — small businesses. 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Should Companies Have to Disclose Their ‘Beneficial Owners’ at Formation to Deter the Use of Shell Companies?