The Corporate Transparency Act (CTA) has been touted as a measure to combat money laundering and financial crimes, but beneath its surface lies a more insidious reality: the Corporate Transparency Act puts small business at a significant competitive disadvantage. By requiring these businesses to disclose sensitive information, the CTA exposes them to increased risk and vulnerability, particularly concerning their intellectual property and patents.
The Unfair Burden on Small Businesses
The CTA mandates that small businesses file Beneficial Ownership Information Reports (BOIRs), which include detailed information about their ownership and control structures. This requirement not only imposes a substantial financial burden, with estimated compliance costs reaching $8,000 per company, but it also makes sensitive information more accessible, putting small businesses at a heightened risk of intellectual property theft and corporate espionage.
Increased Exposure and Risk
The CTA’s reporting requirements are particularly concerning for small businesses that rely on their intellectual property and patents to compete in the market. By making this information more accessible, the CTA inadvertently provides competitors with valuable insights into a company’s operations and strategies. This exposure can lead to the theft of proprietary information, undermining the competitiveness of small businesses.
The Small Business Competitive Disadvantage
The CTA disproportionately affects small businesses, which lack the resources to navigate the complexities of the law and its reporting requirements. While large corporations are totally exempt of putting their information in such an exposing position. The Corporate Transparency Act clearly puts small business at a disadvantage.
The Unconstitutional Nature of the CTA
The CTA has been challenged in court, with a federal court in Alabama ruling it unconstitutional due to its excessive burden on small businesses and lack of a sufficient nexus to any enumerated power. This ruling highlights the need for a more balanced approach that protects national interests without crippling small businesses.
The Corporate Transparency Act Puts Small Business at a Competative Disadvantage
If you want to fight back against the federal government’s attack on small business on behalf of the corporations that own them, join SWORD. We are a network of small businesses who are fighting to make the interest of small businesses be heard.
The Corporate Transparency Act, while intended to combat financial crimes, inadvertently places small businesses at a competitive disadvantage. By requiring the disclosure of sensitive information, it exposes these businesses to increased risk and vulnerability. It is crucial for policymakers to reconsider the CTA’s impact on small businesses and work towards a more equitable solution.
