Tuesday, March 17, 2009

Senate Introduces "Incorporation Transparency and Law Enforcement Assistance Act"

On March 11, 2009, Sens. Levin, Grassley and McCaskill introduced the Incorporation Transparency and Law Enforcement Assistance Act (the "Act"). If enacted, the Act would require each person that intends to form a corporation or limited liability company in a U.S. state to provide a list of the U.S. and non-U.S. beneficial owners of the corporation or limited liability company to such state, if such state receives funding from the Department of Homeland Security. Certain additional supporting evidentiary documentation of the beneficial owners may be required as well. A sponsor forming a private fund as a Delaware corporation or limited liability company will therefore, in all likelihood, be required to disclose all beneficial owners of such fund.

For purposes of the Act, beneficial owner means an individual who, directly or indirectly, is able to control, manage, or direct a corporation or limited liability company as a result of having a level of control over, or entitlement to, the funds or assets of such corporation or limited liability company.

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