Corporations and Associations - Transparency - Beneficial Ownership
If enacted, SB954 would create a formal procedure requiring reporting entities to submit detailed information, including the names and addresses of beneficial owners who control at least 25% of the ownership of the business. This initiative is expected to foster a more transparent business environment by ensuring that those with significant control of businesses cannot remain hidden behind layers of corporate structure. The law will also establish penalties for non-compliance, thereby incentivizing businesses to adhere strictly to the new regulations.
Senate Bill 954, titled 'Corporations and Associations - Transparency - Beneficial Ownership,' aims to enhance transparency regarding the beneficial ownership of business entities in Maryland. The bill mandates that certain business entities must file a report with the State Department of Assessments and Taxation, disclosing vital information about their beneficial owners. The primary goal of this requirement is to provide a clearer view of who ultimately controls or benefits from these entities, which can help combat issues like money laundering and tax evasion.
While the bill is generally aimed at improving transparency, it may also face opposition due to privacy concerns. Critics may argue that requiring the disclosure of beneficial ownership could compromise personal privacy and deter some from doing business in Maryland, especially if they fear their information will be disclosed. Moreover, the prohibition on the inspection of the reports filed under this Act may lead to debates about adequate transparency versus the right to privacy.
SB954 outlines that reporting entities formed before the bill takes effect must file their reports by a specified date, ensuring a smooth transition to the new system. The State Department of Assessments and Taxation will also be tasked with developing regulations to enforce these requirements, thereby establishing a framework for compliance and oversight of beneficial ownership disclosures.