Small Businesses

More Changes to Enforcement of the Corporate Transparency Act and BOIRs

December 27, 2024 | Morgan B. Brading

We have written previously about the effects that ongoing litigation in Texas Top Cop Shop, Inc. v. Garland, has had on the reporting requirements established by the Corporate Transparency Act. For more information on the CTA and Beneficial Ownership Information (BOI) reporting requirements check out this post. For other blogs related to Texas Top Cop look here.

As the situation changes, and rather than continue to post blog after blog on the current status of the BOI reporting requirements, all updates will live on this post for now. As we endeavor to provide updates as soon as possible in one central location, please be aware that there may be delays. If you would like our office to file the BOI on behalf of your business, please contact our office.

Current status of CTA Reporting Requirements: VOLUNTARY (Updated: 12/27/2024)

FinCEN Issues Update on Beneficial Ownership Information Reports

December 10, 2024 | Morgan B. Brading

Time-for-Legal-services-160137293_725x483-1-300x200
As we discussed in our prior update, a federal court in Texas has issued a preliminary injunction against the Corporate Transparency Act (CTA) reporting requirement, the Beneficial Ownership Information Report (BOIR). (You may recall that the CTA requires companies created before 2024 to file BOIRs before January 1, 2025; new companies formed in 2024 to file within 90 days of their creation; and new companies formed after 2024 to file within 30 days of their creation.)

The Financial Crimes Enforcement Network (FinCEN) has issued a statement that all reports during the preliminary injunction are considered “voluntary” and there will be no penalty for reporting companies who fail to file during that period. In their statement, FinCEN maintains that they believe the CTA is constitutional and vital in protecting the United States and its citizens from financial and other crimes.

What does this statement mean, if anything, for your small business?

Companies Need Not File Beneficial Ownership Information Reports – at least for now

December 9, 2024 | Morgan B. Brading

Gold-Gavel-photo-credit-by-pixaby-300x165
The Corporate Transparency Act (CTA) requires most small business corporations and limited liability companies to file Beneficial Ownership Information Reports (BOI reports or BOIRs) with the Financial Crimes Enforcement Network (FinCEN), a part of the United States Department of Treasury. The purpose of the reports is to give law enforcement information regarding the people who own or control companies that may not otherwise be available to them, primarily for the purpose of investigating money laundering and other financial crimes. For companies that were formed before January 1, 2024, BOIRs are due by January 1, 2025.

At least they were before this week. On December 3, the United States District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc. v. Garland (civil action number 4:24-CV-478) ruled that the CTA is likely unconstitutional and issued a nationwide preliminary injunction prohibiting the enforcement of the BOIR requirement. In doing so, the court wrote, “[R]eporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”

For several reasons, this is not the last word on the CTA. First, the Government has already appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, which could set aside the preliminary injunction.

Basics of Business Valuation: A Guide for Business Owners in Indiana

October 1, 2024 | Michael R. Smith

iStock-1504303841_optimized-1-300x188 Determining the value of a small business is a critical step for various purposes, including selling the business, merging with another company, or resolving shareholder disputes. Business valuation involves assessing the economic value of a company, and several methods can be used to achieve this. Business valuation is both an art and a science. A proper valuation requires a trained expert, and they are not cheap. The valuation of a small business can run from a few thousand dollars to several tens of thousands of dollars.

Even though a proper appraisal is the wheelhouse of experts, small business owners should understand the fundamental principles. In this article, we’ll explore the basics to help you know what to expect from a valuation.

Why Business Valuation Matters

New Federal Reporting Requirement for Business Entities

August 29, 2024 | Michael R. Smith

suspicious-young-man-peeking-and-looking-at-camera-through-blinds-mistrust-concept-1124692168_726x484-300x200 You may have heard of a new reporting requirement that took effect on January 1, 2024, under the federal Corporate Transparency Act (or CTA). The report is called a Business Ownership Information Report (or BOIR). Most limited liability companies (LLCs), corporations, and other types of business entities are now required file a report with the Financial Crimes Information Center (or FinCEN) disclosing the names of the people who, directly or indirectly, own or control the business entity. A wealth of information regarding the CTA and BOIRs is available at the BOIR home page at https://www.FinCEN.gov/boi; the Small Entity Compliance Guide at https://www.FinCEN.gov/boi/small-entity-compliance-guide; and the list of frequently asked questions at https://www.FinCEN.gov/boi-faqs#A_1. Some basic information is provided below.

What is the purpose of the CTA?

The purpose of the Corporate Transparency Act, passed by Congress in 2021 on a bipartisan basis, is to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures. The BOIR provides law enforcement with information that may not otherwise be readily available to them.

Small Businesses Receive Help with Coronavirus Paid Leave

March 26, 2020 | Michael R. Smith

As we discussed in a recent post, the Families First Coronavirus Response Act (“FFCRA”) requires small businesses to paid employees for time away from work for various reasons related to the coronavirus epidemic.

The FFRCA provides two types of benefits.

Employers must pay an employee at his or her regular rate of pay if the employee is unable to work or telework because of a federal, state, or local order related to COVID-19, or because the employee has been advised by a health care provider to self-quarantine because of COVID-19 concerns, or because the employee has symptoms of a coronavirus infection and is seeking a diagnosis.

Small Businesses Must Pay Employees for Coronavirus Absence

March 23, 2020 | Michael R. Smith

[For an update based on agency guidance please see Small Businesses Receive Help with Coronavirus Paid Leave.]

On March 18, Congress passed, and the President signed on the same day, the Families First Coronavirus Response Act (FFCRA) that, among other things, requires employers to give employees paid time off for certain absences that result from the COVID-19 coronavirus pandemic. This article summarizes the obligations of employers and the rights of employees under the FFCRA. This article is only a summary and does not address all the details and nuances of the statute. In addition, because the FFCRA was enacted and signed so quickly, there may be questions without obvious answers. You may contact our office to inquire about obtaining advice regarding your specific situation as either an employee or employer.

What Employers Are Covered?

Revised Policy on the Use of Unpaid Interns

August 21, 2018 | Michael R. Smith

We previously discussed whether nonprofit organizations and for-profit businesses can use unpaid interns without violating the Fair Labor Standards Act (or FLSA). We also discussed allegations of violations of the FLSA related to unpaid interns in the fashion industry.

Earlier this year, the Department of Labor revised its policy, known as Fact Sheet #71, for determining whether businesses may use unpaid interns. The old 2010 policy used a six-factor test, with the presence of all six factors required in order for businesses to use unpaid interns without violating the FLSA. The new 2018 policy considers the following seven factors to determine whether the business or the intern is the primary beneficiary of the internship.

The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.

Tax Reform

December 19, 2017 | Michael R. Smith

If you’re not aware that Congress is working on a major revision to federal tax law, you’ve not been paying much attention to the news. The House of Representatives passed its version of the Tax Cuts and Jobs Act, then the Senate passed a similar, but not identical, bill. The bill went to conference committee to work out the differences between the House and Senate versions of the bill, and last week the conference committee issued its report. It currently appears that the conference committee’s recommendations will be approved and become law.

If you have the patience and desire to read the committee report, I suggest you skip to the Joint Explanatory Statement of the Committee of Conference that begins page 191 of the report (which is page 205 of the PDF file) . The pages preceding that set forth language to be inserted into the Senate version of the bill, but not the full text of the final bill. On the other hand, you’re looking for a more concise summary of some of the changes that will affect individuals and small businesses, I refer you to a side-by-side comparison of the current law and the law as it is expected to pass, written by Paul Bogdanoff of Bogdanoff Dages & Co. PC, a CPA and my friend of many years.

While the new law does not take effect until the 2018 tax year, some of its provisions may affect decisions you make in 2017. For example, the increase in the standard deduction (from $6,350 to $1200 for a single person, and from $12,700 to $24,000 for a married couple filing jointly) means that many people who are accustomed to itemizing deductions will no longer do so. As a result, those people will no longer receive a tax benefit from charitable contributions or other itemized deductions. Individuals in that category may want to accelerate charitable contributions and other deductible expenditures that are planned for 2018 by making them before the end of 2017.

Business Lawyers, Accountants, and Insurance Brokers — and the 1908 Chicago Cubs

March 15, 2017 | Michael R. Smith

I’ve written before about the need for the owners of small businesses to have at least three professionals: a business lawyer, a tax accountant, and an insurance broker. Because it has been a while, and because the advice is so important, I decided to write about it again. Thinking about a group of three professionals led me to consider analogies to other groups of three people.

The first thing that came to mind was the traditional English nursery rhyme:

Rub a dub dub,