California Partition Law Blog
The Corporate Transparency Act of 2020 (the “CTA”) is a Federal law set to go into effect on January 1, 2024. It forces certain members of businesses (those who formed them and those who own large portions of the entity) to report sensitive information to the Federal Government.
Congress’ justification is that more than two million corporations and LLCs are formed in the United States each year. Yet, most or all of the States do not require information about the beneficial owners of the corporations and LLCs.
This allows bad actors to conceal their identities while using their entities to facilitate illegal activity, including money laundering and the financing of terrorism. The CTA seeks to shine a light on these bad actors, thereby protecting interstate commerce and protecting vital national security interests. (P.L. 116-283, Div F, Title LXIV, § 6402, 134 Stat. 4604.)
When business entities become subject to internal dissension, it’s not uncommon for several members to approach the court system and seek to dissolve the entity. Often, this is in the best interest of all involved.