New Reporting Requirements for U.S. Companies
From Jan 1, 2024, U.S. entities must report individuals who directly or indirectly hold significant ownership interests. Non-compliance may result in penalties.
The CTA entails that new reporting requirements will take effect from January 1, 2024. From then on, all U.S. companies are obligated to report comprehensive information about all their beneficial owners, officers, and board members to the Financial Crimes Enforcement Network, commonly known as "FinCEN." This directive bears resemblance to the reporting structure established in Denmark, where owners, officers, and board members must be reported, including when there is a change to the same. As these changes come into effect, staying informed and proactive is essential.
The Corporate Transparency Act
The Corporate Transparency Act (CTA) was enacted in 2021 and represents a pivotal shift in regulatory requirements for U.S. companies. The act was passed to enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities.
Applicability and Reporting Criteria
Entities must identify and report individuals who, either directly or indirectly, hold a substantial ownership interest in the company. This interest is often defined as a 25% or more ownership or control stake. The scope of this mandate extends to all U.S. companies, with some exceptions. Additionally, certain other individuals such as officers and board members are also subject to reporting requirements.
Documentation Requirements
The reporting process necessitates the submission of comprehensive identification information for all relevant individuals who need to be reported. Fulfilling these documentation requirements is crucial to ensure compliance with the Corporate Transparency Act.
Deadline Considerations
Companies are expected to report any changes within 30 days of occurrence. Notably, entities registered before January 1, 2024, must submit an initial report by January 1, 2025, or within 30 days of any changes during the year 2024. It is imperative to meet these deadlines, as failure to do so may result in penalties.
The DI USA team aims to keep you well-informed and provide crucial updates. We are therefore here to assist you in navigating these reporting requirement changes. If you should have any follow-up questions you are always welcome to contact us at thhe@di.dk.
DI USA
Danish Industry has been physically present in the U.S. since 2007, with an office located in New York City today. Our mission is to contribute to the success of DI's members in the U.S. by assisting them with the establishment, strategic business development, and political advocacy.
By being physically present in the U.S., Danish Industry helps ensure that Danish businesses have access to a strong network of decision-makers and partners, and thereby promotes greater visibility for Danish solutions.
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