Our healthcare and business law firm works with medical practices to ensure compliance with state and federal laws, rules, and regulations. The Corporate Transparency Act (“CTA”) aims to combat illicit activity including tax fraud and money laundering. The reporting rule under the CTA requires certain entities to file beneficial ownership information (“BOI”) reports. This has raised an important question for healthcare practices structured to comply with the Corporate Practice of Medicine (CPOM) doctrine: Are members of a Management Service Organization (“MSO”) providing non-clinical services to a medical practice “beneficial owners” under the CTA? This blog post dives into that question. If you need assistance understanding how the reporting rule applies to your business or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.
Understanding Beneficial Ownership Under the CTA
A “beneficial owner” is defined by the CTA as any individual who:
- Directly or indirectly owns 25% or more of an entity; or
- Exercises “substantial control” over the entity.
For most MSOs, the focus is on the “substantial control” standard. According to the CTA, substantial control includes: Continue reading ›