Category: Corporate & Business law
Corporate Transparency Act Beneficial Ownership Reporting: Compliance is Compulsory
November 25, 2024 | Carole Clark Isakson
Update December 19th, 2024 On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, enjoining the federal government from enforcing the Corporate Transparency Act (CTA) and its reporting deadlines. On December 13, 2024, the Department of Justice (DOJ) filed an Emergency Motion for Stay Pending Appeal in the Fifth Circuit requesting an expedited briefing schedule and a ruling “as soon as possible, but in any event no later than December 27, 2024, to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.” Reporting companies should continue monitoring developments in the coming days in case the January 1, 2025 deadline for filing is reinstated. Ready. Congress passed the Corporate Transparency Act (CTA) in 2020 as part of its initiative to crack down on illicit activities, such as money laundering, commonly associated with shell companies. Under the CTA, many entities formed or registered to do business in the United States will be required to report various information concerning their beneficial owners and decision-makers. The idea behind the law is to unmask the natural persons behind a given entity. The Financial Crimes Enforcement Network (FinCEN), under the direction of the United…
Read MoreHow to Coordinate Business Succession & Estate Planning
October 30, 2024 | Carole Clark Isakson
At some point, many business owners execute a will or trust to provide for the disposition of their personal assets. Those dispositions will either specifically or generally deal with their business ownership interests as well. However, business succession planning is also affected by an entity’s governing documents. This blog addresses the possible conflicts between the entity documents and the individual owner’s estate planning documents. Make sure your business attorney and estate planning attorney are each aware of your plans so you can avoid such conflicts. Governing Documents Affect Business Succession Planning When a business owner makes an estate plan, they must decide where all their assets are to go, including ownership in the business. The owner—let’s call her Sam—may wish to leave half of XYZ Properties to her three children for their benefit. So, Sam’s will or trust will state that her ownership interests in the company (or perhaps simply all her assets) are to be divided equally among her three children. Whether or not this will actually happen depends on the governing documents of XYZ Properties. There are several forms of business entities. But no matter the type of business, the owner(s) intentionally created it, and in cases where there is more than one owner, the owner intentionally chose the other person(s) with whom…
Read MoreBe Wary of Letters from Lawyers Claiming Your Company Name Is at Risk
September 16, 2024 | Carole Clark Isakson
Over the last several months, we have seen an uptick in the number of false claims being made concerning company names. These claims come in the form of a letter from a lawyer warning the recipient that its business name is about to be “taken” by a third party. There is an offer of help, and frequently a claim that if the recipient doesn’t act, this unknown third party will file a trademark application on the company name and deprive the recipient of the right to use it. THESE CLAIMS ARE GENERALLY FALSE. There is a difference between an entity name (i.e. for an entity that is created at the Secretary of State level) and a trademark, although they can certainly also be the same. A trademark designates the source of goods or services. It exists, meaning you own rights to it, when you start using it. One way to enhance the protection of a trademark is to file an application to register it with the United States Patent and Trademark Office—though you still own it and have rights to it even if you do not register it. This is a common misconception, and one that lawyers prey upon. Simply put, your company name is yours in the state where you created it. And if your…
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