On April 10, 2024, GHA’s Tom Addis will present a webinar on the federal Corporate Transparency Act that went into effect on January 1, 2024. Tom has been working with existing and new clients in navigating the reporting requirements under the new law. Enacted in 2021, the CTA aims to combat illicit activity including tax… Continue reading →
On April 10, 2024, GHA’s Tom Addis will present a webinar on the federal Corporate Transparency Act that went into effect on January 1, 2024. Tom has been working with existing and new clients in navigating the reporting requirements under the new law. Enacted in 2021, the CTA aims to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. Under the new legislation, businesses that meet certain criteria must submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), providing details identifying individuals who are associated with the reporting company. The webinar is presented in conjunction with the Illinois Small Business Development Center for the Metro East at Southern Illinois University – Edwardsville.
Goldenberg Heller & Antognoli, a full-service law firm based in Edwardsville, Ill., announced it will be opening a new office in Clayton, Missouri. The office will be located at 168 N. Meramec Avenue, Suite 101. “We are excited to have a new office in Clayton,” said partner and Clayton resident, Tom Rosenfeld. “Having an office… Continue reading →
Goldenberg Heller & Antognoli, a full-service law firm based in Edwardsville, Ill., announced it will be opening a new office in Clayton, Missouri. The office will be located at 168 N. Meramec Avenue, Suite 101.
“We are excited to have a new office in Clayton,” said partner and Clayton resident, Tom Rosenfeld. “Having an office in the heart of Clayton, the fastest growing community in the area, will allow us to better serve our many clients in the St. Louis area.”
The firm, which has more than 30 years of experience in the areas of business and commercial law, creditor’s rights, estate planning, class actions, intellectual property, asbestos litigation and personal injury, plans to utilize the new space at the end of the month.
For more information about Goldenberg Heller & Antognoli, please visit www.goldenbergheller.com or call (800) 782-8492.
On February 15, 2024, GHA’s Tom Addis will present a webinar on the Illinois Paid Leave for All Workers Act that went into effect on January 1, 2024. The Paid Leave for All Workers Act allows workers to earn up to five (5) days of leave from work each year. Workers can use paid leave… Continue reading →
On February 15, 2024, GHA’s Tom Addis will present a webinar on the Illinois Paid Leave for All Workers Act that went into effect on January 1, 2024. The Paid Leave for All Workers Act allows workers to earn up to five (5) days of leave from work each year. Workers can use paid leave for any reason and employers cannot require workers to provide a basis for their time off request. Workers earn one (1) hour of paid leave for every 40 hours they work. Tom has counseled clients on compliance with the new law, including drafting policies to implement the requirements of the Act. The webinar is presented in conjunction with the Illinois Small Business Development Center for the Metro East at Southern Illinois University – Edwardsville.
Understanding the Corporate Transparency Act: A Guide for Business Owners Introduction: The Corporate Transparency Act (CTA) is a new federal law aimed at combating money laundering, fraud, and other illegal activities by increasing transparency in corporate ownership. As a business owner, it is important to understand the implications of this law and the steps required… Continue reading →
Understanding the Corporate Transparency Act: A Guide for Business Owners
Introduction:
The Corporate Transparency Act (CTA) is a new federal law aimed at combating money laundering, fraud, and other illegal activities by increasing transparency in corporate ownership. As a business owner, it is important to understand the implications of this law and the steps required to comply with its provisions. This overview of the CTA outlines the actions you need to take to ensure compliance.
What is the Corporate Transparency Act?
The CTA, enacted by Congress in January 2021, directs the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to implement new reporting requirements for domestic and foreign entities registered to do business in the United States. The law aims to enhance the disclosure of Beneficial Ownership Information (BOI) to prevent illegal activities.
Who is subject to the new reporting requirements?
All non-exempt US companies, including limited liability companies (LLCs) and corporations, are subject to the new disclosure requirements. Under the CTA, these types of entities are known as Reporting Companies. Reporting Companies need to file reports with FinCEN that identify two categories of individuals who are: (i) beneficial owners of the entity, and (ii) company applicants of the entity. We recommend you consult with a professional advisor to determine your specific obligation.
Who is a Beneficial Owner?
Beneficial ownership includes individuals who exercise Substantial Control over the company, or own or control (directly or indirectly) at least a 25% interest in the company. Substantial Control means:
Serving as a senior officer;
Having authority to appoint or remove a senior officer or the controlling majority of the board of directors; or
Having substantial influence over important decisions.
Who are Company Applicant(s)?
There may be two Company Applicants:
The individual who directly files the document that creates or registers the Reporting Company;
The individual who is primarily responsible for directing or controlling the filing of the relevant document by another.
What entities are exempt from the reporting requirements?
The CTA excludes 23 types of entities—most are already registered or regulated—from reporting. One of the more important exemptions is for large private operating companies (20+ full time employees and $5 Million in gross receipts/sales).
What information needs to be disclosed about a Beneficial Owner?
Under the CTA, Reporting Companies must file and maintain a Beneficial Owner Information Report with FinCEN. This report includes identifying information for all beneficial owners and company applicants. Reporting Companies must report the individuals’ BOI to FinCEN, including:
Full legal name;
Date of birth;
Complete current address; (no agents or P.O. Boxes)
Unique identifying number from a U.S. passport, state ID, driver’s license, or non-expired foreign-issued passport; and
An image of the identification document from which the unique identifier was obtained.
An alternative approach may be if an individual provides these pieces of information to FinCEN directly, the individual may obtain a “FinCEN identifier number” which can then be provided to FinCEN on a BOI report in lieu of the required information about the individual.
When are you required to file?
For Reporting Companies created prior to January 1, 2024, the Reporting Company has until January 1, 2025, to file its initial BOI report. For Reporting Companies created on or after January 1, 2024, the Reporting Company must file its initial report within 90 days of the earlier date on which it receives actual notice of creation, or a secretary of state first provides public notice of the creation of the entity. An Entity formed after January 1, 2025, has 30 days to file its BOI Report. If there are any changes in Beneficial Ownership Information, the Reporting Company has 30 days to inform FinCEN of such changes.
Who has access to Reported Information?
Under the CTA, FinCEN will store the BOI reported information in a secure, nonpublic database referred to as the Beneficial Ownership Secure System (“BOSS”). Reported information in the database will not be made available to the public. However, FinCEN may disclose the reported BOI only if requested by certain U.S. federal agencies, or by state, local or tribal law enforcement agencies.
What are the penalties for noncompliance?
Noncompliance of the CTA can result in civil penalties and in cases of abuse, criminal penalties.
Conclusion:
The CTA introduces new reporting requirements for business owners to disclose Beneficial Ownership Information. As a responsible business owner, you should understand the implications of this law and take steps to comply.
Important Disclosure: This brief overview is for information and discussion purposes only. It is not intended to provide, nor should it be relied on for legal advice.
All information provided herein is based on sources currently available and believed to be accurate. It is important to note that regulations have not yet been published.
Please contact our office if you would like to further discuss the CTA and filing requirements for your business entity.
When forming a business, using a limited liability company, or LLC, can have several advantages. For many years, Illinois courts had maintained that an LLC member or manager could not be held liable for torts he or she personally committed while acting pursuant to his or her role within the business. On January 1, 2020,… Continue reading →
When forming a business, using a limited liability company, or LLC, can have several advantages. For many years, Illinois courts had maintained that an LLC member or manager could not be held liable for torts he or she personally committed while acting pursuant to his or her role within the business.
On January 1, 2020, however, this protection evaporated when the Illinois General Assembly amended the State’s Limited Liability Company Act. This change has eliminated the legal indemnity previously offered to Illinois LLC members and managers.
LLC Member Tort Liability Before January 1, 2020
Prior to the beginning of this year, Illinois LLC members and managers were shielded from civil liability for their tortious acts. This protection stemmed from two state appellate opinions, Dass v. Yale and Carollo v. Irwin, both of which interpreted the Limited Liability Company Act as it was written at the time. Looking at the statute’s pre-amendment language, the courts in both cases determined that an LLC member or manager, when acting on behalf of the business, could not be held personally liable for his or her wrongful acts, including fraudulent conduct. This result came from a reading of section 10-10 of the Act, which stated that:
the debts, obligations, and liabilities of a limited liability company, whether arising in contract, tort, or otherwise, are solely the debts, obligations, and liabilities of the company. A member or manager is not personally liable for a debt, obligation, or liability of the company solely by reason of being or acting as a member or manager.
Based upon this language, the status quo for Illinois LLC members and managers was a guarantee of broad, wide-reaching protections that shielded them from liability, provided that they were acting on behalf of their businesses.
LLC Member Tort Liability After The Amendment
As of January 1, 2020, the legal indemnity that LLC members and managers enjoyed vanished, with the amendment of the Illinois Limited Liability Company Act. The amended language specifically overruled Dass and Carollo, clarifying section 10-10 of the Act to clearly state that members and managers of an LLC may be liable for tortious conduct, despite the fact that their wrongful acts or omissions may have been carried out on their LLC’s behalf.
As a result of the amended Limited Liability Company Act, LLC members and managers should carefully police their conduct when acting on behalf of their businesses. The safety net they were once able to utilize has been legislatively cut.
