ASA Supports Repealing the Corporate Transparency Act

ASA, along with 98 organizations, sent a letter to Sen. Tuberville (R-AL) and Davidson (R-OH) in strong support of their legislation to repeal the Corporate Transparency Act (CTA) entitled the Repealing Big Brother Overreach Act. Per their letter, “the CTA was designed to help law enforcement prevent money laundering by requiring shell companies to report information regarding their beneficial owners (BOI) to the Department of Treasury. The law, however, defines a shell company as any legal entity with 20 or fewer employees or $5 million or less in revenues. In other words, every small business in the United States.” The concept of beneficial owner is broadly defined as well, and includes owners, senior management, members of the board, and any employee or outside consultant exerting significant control over the businesses’ operations. Covered entities must report and regularly update the personal information of their “beneficial owners” to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) or face significant fines and jail time.

Last month, the District Court for the Northern Alabama ruled the CTA exceeded the Constitution’s enumerated powers and was therefore unconstitutional, but the resulting injunction applies to the plaintiffs only, members of the National Small Business Association. As a subsequent notice from FinCEN made clear, all other covered entities are still required to file their BOI reports by the end of the year.

Per their letter, “this legislation would put an end to this remarkable overreach by repealing the CTA in its entirety. It would end this unnecessary reporting regime before it gets started and it would give Congress the opportunity to craft a better approach that balances our national security needs with the interests and rights of law-abiding small business owners.”