East Central Reporter

Rep. Brad Halbrook has informed business owners in his district about significant updates to the Federal Corporate Transparency Act (CTA). This federal law mandates companies to disclose their "beneficial owners," aiming to close loopholes that have been exploited for illicit activities such as money laundering and funding terrorism.

Halbrook explained, “The CTA is federal Law that has far-reaching implications for businesses across the United States. It requires companies to disclose their ‘beneficial owners’—those who ultimately own or control the company—by helping close some loopholes that bad actors have exploited for years to launder illicit money, fund terrorist organizations, and commit other serious financial crimes.”

Certain entities are exempt from these reporting requirements. These include large operating companies with over 20 full-time employees, banks, credit unions, investment firms regulated under other laws, and nonprofits like charities and religious organizations.

A recent development in Texas has introduced a new element to the situation. A federal judge issued a preliminary injunction against parts of the CTA. Some groups claim that the reporting requirements are overly burdensome or infringe on privacy rights. This legal challenge will delay implementation and may lead to changes in enforcement.

“If you’re a business owner, it’s essential to understand your responsibilities under the CTA—and stay updated as the legal challenges unfold. As for now, the injunction is in place,” Halbrook stated.