Understanding the Implications of the New U.S. Federal Law on Beneficial Ownership

#USBeneficialOwnershipLaw #USCompanies

In the United States of America (“U.S.”), as of January 1, 2024, every company within 90 days after the incorporation of a new entity will be required to report to the Resident Agent the following details about the company and its Beneficial Owner:

• The legal name of the company.

• The current address of its principal place of business.

• If the principal place of business is not in the U.S., then the company will report the address from which it conducts business in the U.S.

• EIN (Tax Identification Number: all new entities will be required to obtain an EIN from January 1, 2024).

• The legal name of the Beneficial Owner, date of birth, and residential address.

• A unique identification number for the Beneficial Owner, derived from an acceptable identification document (for international clients, the passport number).

• A scanned copy of the passport or identification document.

Information about the entity and the Beneficial Owner will be private information. It will be uploaded into an encrypted database maintained by the U.S. Government with the highest level of security.  The public will not have access to this database.  Even other government agencies will not have direct access to this information.  The data will only be shared with authorized government offices or through a court order for a criminal case submitted by the Federal Government of the United States.

When applying for the creation of a new entity, the following additional information will be necessary:

1. The name of the Beneficial Owner, their date of birth, and current residential address. P.O. boxes will not be accepted for the physical address.

2. A scanned copy of the Beneficial Owner's passport.

All new entities must obtain an EIN.

What is the EIN?

The EIN will be the primary identification number for the entity.   The Resident Agent of the company will be responsible for obtaining the EIN.

What about entities incorporated before the end of 2023?

All entities incorporated before January 1, 2024, will begin reporting their Beneficial Owner information from 2025.