Bradley attorney Michael Thomason was quoted in the Birmingham Business Journal on the impact of the Corporate Transparency Act (CTA) on businesses around the country to offer new and personal information to the government in upcoming years.
“Millions of companies are going to have to report their beneficial ownership information to the U.S. Department of the Treasury. That's a significant departure from any previous requirement as far as disclosure of ownership in most states, Alabama included,” Thomason said. Some courts are currently working to have the CTA declared unconstitutional; however, the CTA is currently slated to go into effect January 1, 2024.
The information that will be required from businesses if the CTA is in effect includes full legal name, personal or business address, birth date and identifying numbers from a form of legal identification. Thomason speculated that a possible impact of this law is that companies may think twice about forming multiple LLCs for individual projects or lines of business if they are not wholly owned subsidiaries to reduce compliance requirements.
“But I think for the most part, the benefits of still owning an entity as opposed to holding something individually — I think those generally are still going to outweigh having to report this information,” Thomason explained.
The full article “Local lawyers weigh in: What will the Corporate Transparency Act mean for small businesses?” was published in the Birmingham Business Journal on December 8, 2022.