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  • Henry Park

Who owns that shell company in the USA?

In the USA, it used to be easy to create an anonymous shell company.

However, the National Defense Authorization Act includes the Corporate Transparency Act (CTA). This impetus for the CTA was to make it harder to launder money.

The CTA requires that whenever a company is formed (with some exceptions), that the individual forming or registering the company provides to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) provide information about each beneficial owner. A beneficial owner is a person who (i) exercises substantial control over the entity, or (ii) owns 25% or more of the equity interests of the entity. For each beneficial owner, provides. And, the following information must be provided: full legal name of each beneficial owner, current residential or business street address of each beneficial owner, the beneficial owner(s) date of birth, and the beneficial owner(s) driver’s license number or passport number. This information will not be publicly available but will be accessible for government use.

By January 1, 2022, the Secretary of the Treasury should have adopted regulations implementing the CTA's regulations. Once the regulations are adopted:

  • companies formed or registered before the effective date of the regulations -- must submit the required report to FinCEN no later than two years after the effective date of the regulations

  • companies formed or registered after the effective date of the regulations -- must submit the required report to FinCEN at the time of formation or registration

Moreover, companies must update any change in the reported information within one year after the date on which the change occurred.

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