This week, the Federal Trade Comission announced a new ruling banning noncompete agreements between employers and employees. In today’s blog, we look at the ruling and what it might mean for your business.
Navigating the Corporate Transparency Act
Introduction
The United States has recently taken a significant step towards combating financial crimes by enacting the Corporate Transparency Act (CTA). Passed as part of the National Defense Authorization Act, the CTA requires companies to disclose their beneficial ownership information. This new legislation aims to make it harder to conceal illicit activity via corporate anonymity, thereby better safeguarding the U.S. financial system as a whole.
What is the Corporate Transparency Act?
The CTA requires certain U.S. limited liability companies, corporations, and other entities to provide the Financial Crimes Enforcement Network (FinCEN) with detailed information about their beneficial owners or anyone who owns or controls at least 25% of the ownership interests of the entity.
Who Has to Report?
Any entity that is a corporation, a limited liability company, or is created by filing a document with a Secretary of State or similar office under the law of a state or Indian tribe and that does not qualify for an exemption.
Access to the fee-free reporting system became available on January 1, 2024. Companies that existes before that date will have one year to file an initial report with FinCEN. Any company formed after that date will have 90 days to file an initial report.
For any US domestic company, the individual responsible for filing the report is the same individual who filed the companies original formation documents.
What is a FinCEN identifier?
Thsi is a unique number issued by FinCEN to individuals and reporting companies who apply for one by providing all the information that otherwise has to be included in the initial report. A reporting company may use this FinCEN identifier number in lieu of providing each piece of identifying information.
Businesses Implications
For businesses, the CTA introduces another set of compliance requirements.
Companies must make sure their information is up-to-date and accurately reported to the FinCEN. For those falling under the purview of the CTA, they must disclose the name, date of birth, address, and a unique identifying number (such as a passport number) for each beneficial owner. Failing to do so could result in stringent penalties against the offending entity. While the filings themselves can be tedious, the information required also has implications for privacy, as the collected information will be accessible by law enforcement agencies and, in certain cases, by financial institutions conducting due diligence.
If you would like help filing this report or would prefer that we file the report for your company please reach out to us at sseck@seckassociates.com. We are happy to discuss your FinCEN reporting needs or any other potential business needs you may have.
Part Three of Six-Part Series: Trust Variants
Estate planning can be an intimidating process for anyone. Sometimes it feels like the attorneys are speaking a foreign language full of confusing terms and concepts. Seck & Associates is going to present a series of estate planning blogs to break down and provide a brief overview of several common terms, In Part III of our series we explain the many different types of Trusts available.
Part Two of Six-Part Series: The Role of Wills and Trusts
Seck & Associates is going to present a series of estate planning blogs to break down and provide a brief overview of several common terms, concepts, and types of trusts to help our clients work with us to achieve their goals. In Part II of our series this week we will address the role that wills and trusts play in the estate planning process.
Part One of Six-Part Series: Estate Planning Terminology
Seck & Associates is going to present a series of estate planning blogs to break down and provide a brief overview of several common terms, concepts, and types of trusts to help our clients work with us to achieve their goals. In Part I of our series this week we will address the common terms and concepts you will hear discussed in your first meeting with your estate planning attorney.
The FTC Proposes a Ban On Noncompete Agreements
Sheila Seck Named to the 2022 Missouri & Kansas Super Lawyers® List
Seck & Associates is proud to announce that for the seventh year in a row, its founder, Sheila Seck has been named to the 2022 Missouri & Kansas Super Lawyers® List. Super Lawyer rates outstanding lawyers who have attained a high degree of peer recognition and professional achievement. The selection process is based, in part, on peer nominations and peer evaluations. The fact this is based on peer recognition and client satisfaction is a true testament to Sheila's success with both her clients and within her profession.
To learn more about the Super Lawyers® selection process go to https://www.superlawyers.com.
The Estate Planning Essentials for Your Young Adult
Monumental occasions such as your child turning 18, or graduating from high school, bring on a range of emotions from nostalgia to excitement as to what comes next for your young adult. These times are also a reminder that your child is not only changing in your eyes, but also in the eyes of the law. As your child reaches adulthood, they gain a level of autonomy from their parents that they previously didn’t have. While this is a natural step in any young adult’s life, it can bring on some unexpected, and depending on how this arises, traumatizing situations for parents and their children if they aren’t properly prepared in advance.
Successor Corporations
A successor corporation is a new business that arises out of a prior existing one. It is important to keep in mind that taking over another business can leave the new business open to liabilities. It may be in your best interests to work with a business lawyer if you wish to create a successor corporation.
Do You Put the PRO in Procrastinate?
Have you ever caught yourself saying “I’ll get around to it,” or “Someday I’ll get that done” regarding items on life’s “to-do list”? For over 75% of the U.S. population, completing their estate plans is often put off. The drawback to postponing this particular “to-do” item is that “someday” becomes the day when an unforeseen event or crisis happens.
4 Important Reasons to Start Your Exit Plan Today
Approximately 75% of business owners are expected to transition out of their businesses in the next 10 years. Eighty to ninety percent of business owners have most of their wealth tied up in their businesses. Even with a large amount of their wealth concentrated in a single place, 83% of business owners have no written transition plan and 49% of business owners have done no exit planning. With all the businesses for sale in the United States, only about 20% result in a successful sale.
Building a Peak Performing Family Business
Succession Planning: The Earlier the Better
Many entrepreneurs think succession planning is not needed until the owner is ready to retire or resign; however, it is never too early to begin succession planning. Planning early and communicating it often can allow for a smooth transition of leadership and possible enhance, rather than detract from company growth.
How Well-Designed Company Mission & Values Statement Drive Growth
2018 Tax Bill: What You Need To Know
In 2017, congressional leaders pushed the largest tax reform bill in the last 30 years through Congress in record-breaking time. The bill is infamously mysterious. Most Americans know little except for Congressman Ryan’s promise for future taxes “to be done on an index card.”
What does this new legislation mean for them? And what does it mean for the growing entrepreneurial community — working out of our many co-working spaces, like WeWork?
Strategic Thinking: Excelling Your Business Beyond Expectations
Strategic thinking is a reflective state of mind focusing on the performance of the business to gain insights on impacts made. Simply stated, choosing what not to do in the coming year. Yes, I said it, “what not to do”. Let’s practice strategic thinking by stepping into the executive zone and asking some tough questions that will offer business insights.
Determine Your Company’s Strategic Purpose & Growth
Selling Your Business To A Key Employee
Spotting and Preventing Fraud in Small Businesses: Tips for Small Business Owners
Many of us know stories of small businesses succumbing to fraud committed by employees and third parties whether that is employees embezzling funds or third parties scamming business owners out of the company’s cash flow. In either event, individuals can be quite clever in disguising fraud or passing off a scam as legitimate. Business owners should be prepared to spot signs of fraud and have tools in place to prevent fraud in the business.
