A new federal anti-money-laundering law, known as the Corporate Transparency Act, is set to take effect on January 1 due to a recent appeals court ruling. The law requires corporate entities to report information about their owners and control, which could impact millions of businesses.
The US Court of Appeals for the Fifth Circuit has paused an injunction that would have stopped the enforcement of the law, leaving its reporting requirements in place unless another intervention occurs within the next week. This means companies will likely be required to disclose the identities of their “beneficial owners,” those who own 25% or more of the company or exercise significant control.
Proponents of the law argue it is essential for preventing criminals from using the US as a financial haven, citing concerns about anonymity in corporate formation. The World Bank reports that the US was one of the worst performers in conducting due diligence on new corporations as far back as 2011.
However, opponents of the law claim it imposes an undue burden on small businesses and violates constitutional rights. They have been fighting its enforcement, with some lawsuits arguing that the law is unconstitutional and “quasi-Orwellian.”
Source: https://www.nytimes.com/2024/12/23/us/anti-money-laundering-law-court-decision.html