US Corporate Transparency Act misconceptions persist
By Law News
Research reveals legal professionals' misunderstandings about the Corporate Transparency Act but expect positive business impacts
A recent study commissioned by CSC, a leading provider of global business administration and compliance solutions, highlights significant knowledge gaps regarding the Corporate Transparency Act (CTA) among senior in-house legal and compliance executives. Despite these misconceptions, the majority of professionals surveyed anticipate the CTA will have a positive impact on business and trade.
The research, which surveyed 200 senior professionals across industries in the U.S., Continental Europe, the U.K., and APAC, found that 75% of respondents mistakenly believe the CTA will make too much Beneficial Ownership Information (BOI) available to the public. In reality, BOI is accessible only to law enforcement and other government agencies, such as the Financial Crimes Enforcement Network (FinCEN), for investigatory purposes—not to the public.
Effective as of January 1, 2024, the CTA aims to strengthen U.S. national security by improving the detection and prevention of corruption, money laundering, and terrorism. The law requires companies, particularly corporations and LLCs not exempted under the 23 outlined exemptions, to disclose their BOI.
Julie Dallmann, Product Management Director at CSC, reassured concerns about personal identifiable information, explaining that the CTA does not expose BOI to the public. However, 40% of respondents expressed doubt that the CTA and global Ultimate Beneficial Ownership (UBO) regulations would harmonise into a unified global standard in the next 10 years, given the varied and complex regulatory landscape across jurisdictions.
Dallmann also highlighted that regulatory fragmentation, even within the U.S., adds complexity, pushing organisations to seek expert service providers for multi-jurisdictional compliance. CSC’s services help organisations manage these complexities, enabling businesses to focus on strategic priorities.
Despite the concerns, 84% of respondents believe the CTA will foster trust and support stronger business relationships. Nearly half (44%) believe that the U.S. will lead the global push for corporate transparency.
For more details, CSC’s report, The Corporate Transparency Act: Readiness, Concerns, and Implications, can be requested from Amber Liu at cscteam@citigatedewerogerson.com.