By Penny Somer-Greif, Esq.
The federal Corporate Transparency Act, effective January 1, 2024, will require existing and newly-formed companies formed in or registered to do business in the United States to report beneficial ownership information to the U.S Department of the Treasury.
In March, as 2022-23 Chair of and on behalf of the MSBA Business Law Section, I requested an opinion from the MSBA’s Committee on Ethics as to whether, under the Maryland Rules of Professional Conduct, there is an affirmative obligation on the part of a lawyer to notify or attempt to notify former clients of the passage of this Act and the promulgation of the Treasury’s implementing regulations, particularly with regard to any business entity clients that the lawyer may have helped to create prior to the effective date of such regulations (also January 1, 2024).
We recently received a response from the Committee on Ethics in response to our inquiry confirming that a Maryland attorney would have no such obligation with respect to former clients, while noting that “[t]he trickier issue may be determining whether the representation has terminated such that an individual or organization is actually a former client.”
Given that the requirements of the Act and the related Treasury regulations will affect many business entities formed by Maryland attorneys, it was important to get clarification on this issue. We encourage you to review the opinion (just two pages), and to keep in mind that it does not apply to obligations with respect to a Maryland attorney’s current clients. The opinion is available HERE.
Penny Somer-Greif serves as Counsel at Lucosky Brookman LLP. She is an experienced securities and general corporate lawyer, advising clients with respect to private and public securities offerings, periodic and other disclosure obligations under federal securities laws, merger and acquisition transactions, and general corporate and securities law compliance.