Attorneys General sue Treasury over ownership reports

This legal challenge could significantly change how you handle business documentation and compliance in the near future. A group of 21 attorneys general is suing the Treasury Department, arguing that the government has been too lenient in exempting domestic companies from 'beneficial ownership' reporting. These rules were created by the Corporate Transparency Act to prevent money laundering and fraud by requiring businesses to disclose exactly who owns and controls them. For retailers and operators, this matters because it impacts your administrative burden and your relationships with lenders. If the lawsuit succeeds, the 'exemptions' many small and mid-sized businesses currently enjoy could disappear. You may be required to file detailed reports with the Financial Crimes Enforcement Network (FinCEN) regarding your ownership structure. Furthermore, lenders often rely on these reports to approve merchant financing or business lines of credit. A shift in these requirements could lead to more paperwork and stricter 'Know Your Customer' (KYC) checks when you apply for funding or set up new consumer financing programs for your storefront. While the lawsuit is in its early stages, it signals that the period of regulatory leniency regarding corporate transparency may be coming to an end.

Source: American Banker — Top News

← Return to the library· Submit a correction