EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0954*
SENATE BILL 954
C1 4lr2196
By: Senator Sydnor
Introduced and read first time: February 2, 2024
Assigned to: Judicial Proceedings
A BILL ENTITLED
AN ACT concerning 1
Corporations and Associations – Transparency – Beneficial Ownership 2
FOR the purpose of requiring certain business entities to file with the State Department of 3
Assessments and Taxation a report including certain information regarding 4
beneficial owners of the entities; prohibiting the inspection of reports filed under this 5
Act; and generally relating to beneficial owners. 6
BY adding to 7
Article – Corporations and Associations 8
Section 1–210 9
Annotated Code of Maryland 10
(2014 Replacement Volume and 2023 Supplement) 11
BY adding to 12
Article – General Provisions 13
Section 4–327.1 14
Annotated Code of Maryland 15
(2019 Replacement Volume and 2023 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Corporations and Associations 19
1–210. 20
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 21
INDICATED. 22
(2) “ACCEPTABLE IDENTIFICA TION DOCUMENT ” MEANS: 23 2 SENATE BILL 954
(I) A VALID UNITED STATES PASSPORT; 1
(II) A VALID IDENTIFICATION DOCUMENT ISSUED BY A STATE, 2
LOCAL GOVERNMENT , OR INDIAN TRIBE; 3
(III) A VALID DRIVER’S LICENSE ISSUED BY A STATE; OR 4
(IV) IF AN INDIVIDUAL DOES NOT HAVE A DOCUMENT LISTED IN 5
ITEM (I), (II), OR (III) OF THIS PARAGRAPH , A VALID PASSPORT ISSUED BY A FOREIGN 6
GOVERNMENT . 7
(3) “APPLICANT” MEANS AN INDIVIDUAL WHO FILES WITH THE 8
DEPARTMENT ANY DOCUME NT CAUSING A REPORTING ENTITY TO BE FORMED . 9
(4) (I) “BENEFICIAL OWNER ” MEANS A N INDIVIDUAL WHO, 10
THROUGH ANY CONTRACT , ARRANGEMENT , UNDERSTANDING , RELATIONSHIP , OR 11
OTHER MEANS : 12
1. EXERCISES SUBSTANTIAL CONTROL OVER A 13
REPORTING ENTITY ; OR 14
2. OWNS OR CONTROLS AT L EAST 25% OF THE 15
OWNERSHIP INTEREST O F A REPORTING ENTITY . 16
(II) “BENEFICIAL OWNER” DOES NOT INCLUDE : 17
1. AN INDIVIDUAL ACTING AS A NOMINEE , AN 18
INTERMEDIARY , A CUSTODIAN, OR AN AGENT ON BEHALF OF A BENEFICIAL OWNER ; 19
2. AN INDIVIDUAL ACTING SOLELY AS AN EMPLOYEE OF 20
A REPORTING ENTITY AND WHOSE CONTROL OVER O R ECONOMIC BENEFITS FROM 21
THE REPORTING ENTITY ARE DERIVED SOLELY FROM THE EMPLOYMENT STATU S OF 22
THE INDIVIDUAL ; 23
3. AN INDIVIDUAL WHOSE O NLY INTEREST IN A 24
REPORTING ENTITY IS THROUGH A RIGHT OF I NHERITANCE ; OR 25
4. A CREDITOR OF A REPORT ING ENTITY. 26
(5) (I) “REPORTING ENTITY ” MEANS AN ENTITY CREATED BY THE 27
FILING OF ANY DOCUME NT WITH THE DEPARTMENT . 28
SENATE BILL 954 3
(II) “REPORTING ENTITY ” DOES NOT INCLUDE A B ANKING 1
INSTITUTION, AS DEFINED IN § 1–101 OF THE FINANCIAL INSTITUTIONS ARTICLE. 2
(B) (1) SUBJECT TO PARAGRAPH (4) OF THIS SUBSECTION , EACH 3
REPORTING ENTITY SHA LL FILE WITH THE DEPARTMENT A REPORT C ONTAINING, 4
FOR EACH APPLICANT A ND OWNER OF THE REPO RTING ENTITY: 5
(I) THE FULL LEGAL NAME; 6
(II) A CURRENT RESIDENTIAL OR BUSINESS ADDRESS ; AND 7
(III) AN ACCEPTABLE IDENTIFICATION DOCUM ENT. 8
(2) A REPORTING ENTITY SHA LL FILE THE REPORT REQUIRED BY 9
THIS SUBSECTION WITH IN 30 DAYS AFTER THE FILING OF DOCUME NTS WITH THE 10
DEPARTMENT THAT CAUSED THE REPORTING ENTITY TO BE FORMED. 11
(3) IF THE INFORMATION RE QUIRED UNDER PARAGRAPH (1) OF THIS 12
SUBSECTION CHANGES, THE REPORTING ENTITY SHALL FILE AN AMENDE D REPORT 13
WITH THE DEPARTMENT WITHIN 30 DAYS AFTER THE CHANGE . 14
(4) IF A BENEFICIAL OWNER OF A REPORTING ENTITY IS A MINOR, 15
THE REPORTING ENTITY : 16
(I) MAY NOT INCLUDE IN TH E REPORT INFORMATION 17
REGARDING THE MINOR ; BUT 18
(II) SHALL INCLUDE THE INFORMATION REQUIRED UNDER 19
SUBSECTION (B)(1) OF THIS SECTION FOR A PARENT OR GUARDIAN OF THE MINOR. 20
(C) (1) A PERSON MAY NOT KNOWI NGLY FAIL TO SUBMIT A REPORT 21
REQUIRED BY THIS SEC TION. 22
(2) A PERSON MAY NOT CAUSE TO BE FILED A REPORT UNDER THIS 23
SECTION THAT THE PERSON KNOWS CONTAIN S FALSE INFORMATION . 24
(3) THE DEPARTMENT MAY IMPOSE A CIVIL PENALTY FOR A 25
VIOLATION OF THIS SU BSECTION OF $500 FOR EACH DAY THE VIO LATION 26
CONTINUES. 27
(D) THE DEPARTMENT SHALL ADOPT REGULATIONS TO CARRY OUT THIS 28
SECTION. 29
4 SENATE BILL 954
Article – General Provisions 1
4–327.1. 2
(A) EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION , A 3
CUSTODIAN SHALL DENY INSPECTION OF A REPO RT FILED WITH THE STATE 4
DEPARTMENT OF ASSESSMENTS AND TAXATION UNDER § 1–210 OF THE 5
CORPORATIONS AND ASSOCIATIONS ARTICLE. 6
(B) A CUSTODIAN SHALL ALLO W INSPECTION BY A UNIT OF STATE 7
GOVERNMENT IN THE PE RFORMANCE OF THE UNIT’S OFFICIAL DUTIES. 8
SECTION 2. AND BE IT FURTHER ENACTED, That a reporting entity formed 9
before the effective date of this Act shall file the report required by § 1–210 of the 10
Corporations and Associations Article, as enacted by Section 1 of this Act, on or before 11
October 1, 2025. 12
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 13
October 1, 2024. 14