S-1978 : Still Just a Bill

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 company.

Specifically, if certain entities apply to form a corporation or limited liability company, they must file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN). Furthermore, certain existing corporations and limited liability companies must file this information with FinCEN two years after the implementation of final regulations required under this bill.

The bill imposes a civil penalty and authorizes criminal penalties—a fine, a prison term for up to three years, or both—for providing false or fraudulent beneficial ownership information or for willfully failing to provide complete or updated beneficial ownership information.

The Government Accountability Office must study and report on: (1) the availability of beneficial ownership information for other legal entities (e.g., partnerships), and (2) the effectiveness of incorporation practices implemented under this bill.