In the ongoing debate surrounding Maryland’s Beneficial Ownership law, Karen Barbour, president of the Alliance for Hispanic Commercial Contractors (AHCC) advocates for Maryland Senate Bill 363.?Senate Bill 363 was sponsored and presented to the Senate Budget and Taxation Committee by Sen. Justin Ready (R) on Wednesday, January 24th, 2024.?Karen Barbour testified on behalf of the bill.?AHCC, a key player in educating and guiding Hispanic commercial contractors, argues that the existing law poses undue risks to minority interest owners.
Maryland’s current legislation mandates businesses and officers with a 5% or more ownership stake to comply with filing requirements. Violations can result in misdemeanor charges and fines up to $10,000. AHCC contends that owners with a 5% stake often lack significant influence in the company’s management yet are subjected to the same stringent regulations as majority stakeholders.
AHCC emphasizes that owners with less than 25% ownership and no control over the company face potential criminal penalties and fines under the current law. In contrast, the federal government, recognizing the burden on minority interest owners, amended its Beneficial Ownership definition in 2016, focusing on individuals with 25% or more equity interests and those with significant management responsibilities.
Senate Bill 363 seeks to align Maryland’s law with federal standards. The bill aims to protect owners or officers with less than 25% ownership and no control over the company from unnecessary legal complications. By advocating for a more reasonable threshold and focusing on individuals with significant management responsibilities, the bill aims to balance transparency with fairness.
The core intention behind Senate Bill 363 is to shield minority interest owners, especially those rising through exemplary work, from legal complications. Subjecting individuals with less than 25% ownership and no authority to Maryland’s current Beneficial Ownership rules appears disproportionate.
AHCC calls on the Committee to support Senate Bill 363, emphasizing the need for fairness and protection for minority interest owners. Aligning Maryland’s legislation with federal standards would signify a commitment to equity and fairness in the state’s regulatory framework.
In conclusion, Senate Bill 363 represents a proactive step toward refining Maryland’s Beneficial Ownership law to be more inclusive and considerate of diverse ownership structures within businesses. The Committee’s favorable support for this bill would signify a commitment to equity and fairness in the state’s regulatory framework.