How to illumine ownership? Control the controllers
As for the CTA, it requires certain “reporting companies” to report the name, date of birth, current address, and unique identification number (from a passport or driver’s license, for example) of their “beneficial owner(s)” to FinCEN.
This information must be updated every year to reflect any changes.
Subject to certain exceptions, a “beneficial owner” is defined in the CTA as “any individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise:
(i) exercises substantial control over the entity; or
(ii) owns or controls not less than 25 percent of the ownership interests of the entity.”
Moreover, under the CTA, the term “reporting company” means any corporation, limited liability company, or similar entity that is:
(i) created by the filing of a document with the secretary of state or similar office under the laws of a state or Indian Tribe, or
(ii) formed under the laws of a foreign country and registered to do business in the United States by the filing of a document with the secretary of state or similar office under the laws of a state or Indian Tribe.
While the CTA specifies that corporations and limited liability companies are subject to its requirements, it is expected that other pass-through entities synonymous with fund structures will be included as well, such as limited partnerships.
The CTA excludes [from the definition of “reporting companies”] any company that employs more than 20 full-time employees in the United States, annually reports more than $5 million in gross receipts or sales to the IRS, and has an operating presence at a physical office within the U.S.
The CTA also excludes broad categories of publicly traded, regulated, nonprofit and governmental entities.
More specifically, the CTA excludes funds and advisors already subject to reporting obligations to Federal agencies, including mutual funds, private investment funds, SEC Registered Investment Advisers, and Venture Capital Fund Advisers.
