Navigating the Corporate Transparency Act: A Step-by-Step Guide to Filing Beneficial Ownership Information

The Corporate Transparency Act (CTA) has imposed new reporting obligations on many businesses. Our  step-by-step guide will help you understand and fulfill your reporting requirements.

Step 1: Determine if You’re a Reporting Company

The first step is to assess whether your company falls under the CTA's jurisdiction. This involves considering factors such as your company's structure, size, and activities.

Step 2: Identify Your Beneficial Owners

Once you've determined that your company is subject to the CTA, you need to identify all of your beneficial owners. This may require gathering information from shareholders, partners, and other stakeholders.

Step 3: Gather Required Information

For each beneficial owner, you must collect the following information:

• Full name
• Date of birth
• Current residential address
• Unique identifying number
• A photocopy of identification

Step 4: Create Your Report

Using the collected information, you must create a BOI report that accurately reflects your company's ownership structure.

Step 5: File Your Report

The report must be filed electronically through FinCEN's Beneficial Ownership Secure System (BOSS). Be sure to follow the specific instructions and deadlines provided by FinCEN.

Step 6: Maintain Records

After filing your report, it's important to maintain accurate records of your beneficial ownership information to ensure compliance with the CTA and address any future inquiries.

Complying with the Corporate Transparency Act can be complex, but by following this step-by-step guide, you can ensure that your company meets its reporting obligations. For more information or to speak with us about your legal issue, please contact our business attorneys in Ann Arbor at 734-665-4441.Schedule an initial consultation. 

Understanding the Corporate Transparency Act: New Reporting Requirements for Businesses

The Corporate Transparency Act (CTA) has introduced significant changes to the way businesses operate in the United States. Effective January 1, 2024, certain companies are now required to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN).

Who is Affected?

The CTA applies to a wide range of businesses, including:

• Domestic corporations
• Limited liability companies
• Foreign entities registered to do business in the US

However, some exemptions exist, such as for publicly traded companies, certain nonprofits, and large operating companies.

What Information is Required?

Reporting companies must provide detailed information about their beneficial owners, which are individuals who:

• Exercise substantial control over the company
• Own or control 25% or more of the ownership interest

For each beneficial owner, companies must report:

• Full name
• Date of birth
• Current residential address
• Unique identifying number
• A photocopy of identification

Reporting Deadlines and How to File

The reporting deadlines vary depending on when the company was formed. Existing companies must file by January 1,2025, while new companies have shorter deadlines. Reports must be filed electronically through FinCEN's Beneficial Ownership Secure System (BOSS).

The Importance of Compliance

Failure to comply with the CTA can result in significant penalties, including civil fines and criminal penalties. It is essential for businesses to review their company structure and determine if they’re subject to these reporting requirements. Consulting with legal counsel can help ensure full compliance.

The Corporate Transparency Act has introduced new transparency measures for businesses in the United States. Understanding the requirements and complying with them is crucial to avoid penalties and maintain a positive reputation. For more information or to speak with us about your legal issue, please contact our business attorneys in Ann Arbor at 734-665-4441.Schedule an initial consultation. 

Michigan Builders Trust Fund Act: Protecting Subcontractors and Material Suppliers

Are you treating funds paid to you by the owner for the products and services provided under the construction contracts for the project as trust funds? In Michigan, private construction contracts are governed by the Michigan Builders Trust Fund Act (MBTFA). This Act was passed in 1931 as a depression-era measure to afford additional protection to subcontractors and materialmen by outlawing contractors from juggling funds between unrelated projects. 

o   The current statute states that money paid for a construction project “shall be considered by this act to be a trust fund, for the benefit of the person making the payment, contractors, laborers, subcontractors, or materialmen.”    

o   The courts have ruled that a trust is also imposed as to anticipated future costs of a particular project.

o    Under the MBTFA, appropriation (i.e., use) by the contractor of money received before using those funds for the project and “payment by him of all moneys due or so to become due laborers, subcontractors, materialmen or others entitled to payment” is evidence of intent to defraud.

o   Corporate employees or officials can be criminally or civilly liable under the MBTFA for their personal participation in the violation of the Act. 

Learn more about understanding the rights of general contractors here.

Get Started Today: Schedule Your Consultation!

 

For more information or to speak to a construction lawyer in Ann Arbor, Michigan, please contact Matthew Jane at 734-665-4441 or fill out our contact form.

Avoid Business Disputes with an Experienced Business Attorney in Ann Arbor

Avoiding business disputes involves well planned business strategies and planning. There are specific steps that are recommended, such as having proper corporate documents, defining all parties’ roles and responsibilities in all corporate documents, carefully amending corporate documents and agreements according to new laws and regulations, as well as what the parties wish to accomplish through their business agreements, executing employment agreements with owners, complying with the documented corporate formalities, acting in good faith when exercising business judgment, not misusing business assets, avoiding transactions that create conflicts of interest, such as interested parties and not arms’ length transactions, obtaining consent for any interested-party transactions, defining majority and minority interest holders and outlining their specific capital investments and percent stake interests and voting rights, and just being transparent and documenting actions and transactions clearly and thoroughly. This is not an all-inclusive list, but it certainly provides a good outline of steps to aid in avoiding major disputes and issues that can lead to litigation. 

Learn more about business and commercial disputes here.

Contact the business attorneys in Ann Arbor at Pear Sperling Eggan & Daniels, P.C. today, and let us help guide you through business and commercial legal disputes in Michigan. Please contact us at 734-665-4441 or fill out our contact form to schedule an initial consultation. 

What is a Business or Commercial Dispute?

Business and commercial disputes in Michigan are handled through Business Courts, which are specialty dockets created under MCL Section 600.8033 in 2013, and are part of the Circuit Court System in the various Districts. This statute enumerates specific types of business and commercial disputes, and also specifically excludes disputes that don’t fall within these categories. 

MCL 600.833 defines Business or Commercial dispute as:

(i)   An action in which all of the parties are business enterprises, unless the only claims asserted are expressly excluded under subsection (3).

(ii)  An action in which 1 or more of the parties is a business enterprise and the other parties are its or their present or former owners, managers, shareholders, members of a limited liability company or a similar business organization, directors, officers, agents, employees, suppliers, guarantors of a commercial loan, or competitors, and the claims arise out of those relationships.

(iii) An action in which 1 of the parties is a nonprofit organization, and the claims arise out of that party's organizational structure, governance, or finances.

 

Learn more about business and commercial disputes here.

Contact the business attorneys in Ann Arbor at Pear Sperling Eggan & Daniels, P.C. today, and let us help guide you through business and commercial legal disputes in Michigan. Please contact us at 734-665-4441 or fill out our contact form to schedule an initial consultation. 

What You Need to Know About Creating a Limited Liability Company in Michigan

Once your Limited Liability Company is formed, it can be managed by a manager or run by a member or members. A manager would be designated by the LLC according to a clause or provision in the articles of organization stating that the business is to be managed by or under the authority of the manager(s). A member would be a person that has been admitted to an LLC as described in MCL 450.4101 Section 501. There are several ways of admitting a member, but usually, it’s defined in your operating agreement, as agreed to by the members. 

Learn more about member rights when it comes to a limited liability company here.

Contact the business attorneys in Ann Arbor at Pear Sperling Eggan & Daniels, P.C. today, and let us help you set up your Limited Liability Company. Please contact us at 734-665-4441 or  fill out our contact form to schedule an initial consultation.

How to Create a Limited Liability Company in Michigan

In Michigan, Limited Liability Companies are regulated under MCL 450.4101, also known as the "Michigan limited liability company act" (the Act). According to the Act, “Limited liability company" or "domestic limited liability company" means an entity that’s an unincorporated membership organization. The term unincorporated differentiates this form of business entity from a corporation. In order for you to create a Limited Liability Company or LLC in MI, you must fill out an application and file it with the Department of Licensing and Regulatory Affairs (LARA)  in the State of Michigan Corporations Division. 

Learn more about limited liability companies in Michigan here.

Contact the business attorneys in Ann Arbor at Pear Sperling Eggan & Daniels, P.C. today, and let us help you set up your Limited Liability Company. Please contact us at 734-665-4441 or fill out our contact form to schedule an initial consultation.