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Rayner my parade! The importance of specialist advice.
Jemma Brimblecombe
The US has introduced corporate transparency provisions which require certain entities to report information about their beneficial owners.
The new provisions took effect from 1st January this year and have the same broad aim as corporate transparency legislation introduced in other jurisdictions - to “make it more difficult for bad actors to hide behind shell companies or other opaque ownership structures”. This increased openness about beneficial ownership will, it is hoped, help to tackle money laundering and reduce the financing of terrorism.
Any US entity, as well as any non-US entity doing business in the US, must consider these new provisions (which have within its scope not just corporates but also partnerships and possibly trusts). If the provisions apply, the relevant entity must file a report containing details of all individuals who beneficially own it, being those with substantial control or who own at least 25% of the relevant entity. Further reports must also be filed if that information changes.
Civil and criminal penalties may be enforced in the event of non-compliance. It is therefore imperative that the new provisions are reviewed carefully to establish whether they apply and if they do, whose details must be reported and when.
As ever, the devil is in the detail. It cannot be assumed, for example, that the US provisions replicate the equivalent UK provisions. They do not and in some respects the US provisions are wider than those in the UK. For example, details of senior officers such as the CEO, CFO and GC must be reported automatically in the US, unlike in the UK, as they are assumed to have substantial control.
further information
If these new provisions may be relevant to you, please contact me at jyoung@kingsleynapley.co.uk and I will put you in touch with an appropriate US adviser.
about the author
John is a partner in the Corporate, Commercial, and Finance team, specialising in the business needs of entrepreneurial, high-growth, and family businesses. He advises them throughout their lifecycle, from start-up through to listing and beyond.
He specialises in M&A and fundraisings, with a particular focus on M&A transactions in the £5m-100m enterprise value range and private and capital markets fundraises between £500,000 and £20m, often with a cross-border element.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
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