Dakota Business Ownership Documentation Requirements

To onboard with Dakota, businesses must provide proof of ownership. Below is a guide to the required ownership documents based on your business entity type.

Key Definitions

• Ultimate Beneficial Owner (UBO): An individual or entity that owns or controls 25% or more of the business.

• Control Person: A key executive (e.g., CEO, CFO, COO, President, Director) who has significant decision-making authority over the business.

General Requirements

• All UBOs owning 25% or more of the business must be verified.

• Self-generated ownership documents must be signed and dated by a lawyer or third-party CPA.

• Capitalization tables from reputable equity management platforms (e.g., Carta, AngelList, Securitize) do not require a lawyer or CPA signature.

• If a business is owned by another entity, similar ownership documents must be provided for the parent company until all individual UBOs are identified.

• The document must clearly list the entity's name and ownership structure.

Acceptable Ownership Documents by Business Type

Sole Proprietorship

✅ Business License – Must list the sole proprietor as the owner.
✅ Trade Name Registration (DBA) – If the business operates under a different name, the document must show the owner's name.
✅ Tax Filings (Schedule C) – Must show the business income and expenses reported by the sole proprietor.

Partnerships

General Partnership (GP)

✅ Partnership Agreement – Must list all partners and their ownership percentages.
✅ Certificate of Partnership – If registered, must include partner names.
✅ Trade Name Registration (DBA) – If applicable, must include partners’ details.

Limited Partnership (LP)

✅ Certificate of Limited Partnership – Filed with a government body, must list general and limited partners.
✅ Limited Partnership Agreement – Must detail the ownership structure, roles, and contributions.
✅ Schedule of Partners – Must list all partners and their ownership percentages.
✅ K-1 Forms – Issued to partners for tax purposes, showing their share of profit or loss.

Limited Liability Partnership (LLP)

✅ Registration of LLP – Must be filed with a government body and list partners.
✅ LLP Agreement – Must detail ownership and partners’ contributions.
✅ K-1 Forms – Must show each partner’s share of profits or losses.

Corporations

✅ Articles of Incorporation – Must include shareholders (control persons alone are not sufficient).
✅ Stock Certificates – Must be issued to shareholders, proving ownership.
✅ Shareholder Ledger or Cap Table – Must list all shareholders and their ownership percentages.
✅ Shareholders' Agreement – Must define ownership structure and rights.
✅ Board Meeting Minutes – Must document shareholder details and ownership stakes.
✅ SEC Filings (for public companies) – Must include significant shareholders and controlling parties.
✅ K-1 Forms – Must show each shareholder's share of profit or loss.

Limited Liability Company (LLC)

✅ Articles of Organization – Filed with a government body, sometimes listing members.
✅ Operating Agreement – Must define ownership structure and member contributions.
✅ Membership Certificates – Issued to members to confirm ownership.
✅ Membership Ledger – Internal record of members and ownership percentages.
✅ K-1 Forms – Must show each member’s share of profit or loss.
✅ IRS 147(c) EIN Letter – Required for single-member LLCs.

Nonprofit Organizations

(Nonprofits do not have individual shareholders; we verify control persons instead.)
✅ Articles of Incorporation – Must be filed with a government body and list directors or founders.
✅ Bylaws – Must define governance structure and list directors and officers.
✅ Board Meeting Minutes – Must document board members and controlling parties.
✅ IRS Determination Letter – Must confirm tax-exempt status and include details on controlling parties.
✅ Annual Reports – Must be filed with a government body and list directors and officers.

Foundations

(Foundations do not have individual shareholders; we verify control persons instead.)
✅ Articles of Incorporation – Filed with a government body, listing initial directors or founders.
✅ Bylaws – Must establish governance and control structure.
✅ Board Meeting Minutes – Must document decisions regarding controlling parties.
✅ IRS Determination Letter – Must confirm tax-exempt status and list controlling parties.
✅ Annual Reports – Must list directors and officers.

Decentralized Autonomous Organizations (DAOs)

✅ Membership Agreements – Must outline ownership percentages of members or token holders.
✅ Voting Records – Must document control based on token voting or governance mechanisms.
✅ Other Acceptable Documents:

• White Paper

• Membership or Token Agreement

• Governance Framework

Cooperatives

✅ Articles of Incorporation – Filed with a government body, listing members.
✅ Membership Agreement – Must outline terms, rights, and responsibilities of members.
✅ Membership Ledger – Must list all members and their ownership stakes or voting rights.
✅ Members’ Meeting Minutes – Must document decisions and membership changes.
✅ Share Certificates (if applicable) – Must represent ownership stakes or contributions.

Alternative Ownership Documents (For Complex Cases)

If standard documents are unavailable, you may provide:

✅ Ownership Org Charts – A signed chart showing ownership percentages, certified by a lawyer or CPA.
✅ Signed Ownership Attestation Letter – A lawyer- or CPA-certified letter confirming UBOs and their ownership stakes.
✅ Capitalization Table – Must list all shareholders and ownership percentages, certified by a lawyer or CPA.
✅ Well-Known Equity Management Cap Tables (e.g., Carta, AngelList) – Do not require a lawyer or CPA signature.

Important Notes:

• Documents must be clear, complete, and up to date.

• Ownership must be fully accounted for (100%).

• Failure to submit the required documentation may result in onboarding delays.

If you have questions or need assistance, our team is happy to help.