Withers US Private Client & Tax division leader Bill Kambas was featured in Family Capital’s article, ‘Family offices face regulatory hurdle with new transparency act,’ which was published on February 8, 2022. The article discusses the Corporate Transparency Act (“CTA”) and the related challenges family enterprises may face as a result.
Bill shares that “policymakers need to know that family enterprises are good stewards who earn their place in society. CTA compliance and philanthropy are two illustrations of this.” He adds, “compliance with the law is essential but the definition of substantial control will need to be carefully defined. Family enterprises can be so diverse, so unique and you need to answer some questions. How do you calculate a 25% ownership? Do you have a tiered structure, or a pool of discretionary beneficiaries who don’t know whether they are going to get some percentage interest, or not? How do you judge whether different directors, committees, fiduciaries, protectors, or trustees should rise to the level of substantial control? How do you account for the next generation, the broader family enterprise? They may not control anything or receive much of a beneficial interest. They shouldn’t be considered as controlling assets, but they are still beneficiaries.”
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