Category: News & Events
The Corporate Transparency Act and How It Impacts Your Business
February 17, 2022 | Georgia Kellogg
In January of 2021, as part of its initiative to crack down on illicit activities commonly associated with shell companies, Congress passed the Corporate Transparency Act (the “CTA”). Under the CTA, entities formed or registered to do business in the United States will be required to report various information concerning beneficial ownership of the company. The Financial Crimes Enforcement Network (“FinCEN”) has been tasked with preparing the regulations that will govern the beneficial ownership reporting requirement and provide the necessary oversight to ensure these obligations are complied with. With some exceptions, the reporting obligations under the CTA is estimated to impact hundreds of thousands of entities, including corporations, limited liability companies, partnerships, and various non-profit organizations. The most significant impact will be felt by small and mid-size companies who did not previously have any mandated federal reporting responsibilities. It is important to note that these reporting requirements will not go into effect until FinCEN finalizes its regulations. At this time, it is unknown when this will be. On December 7, 2021, FinCEN released proposed regulations, which can be viewed here: https://www.federalregister.gov/documents/2021/12/08/2021-26548/beneficial-ownership-information-reporting-requirements. Once in effect, companies will have one year from the regulations’ effective date (subject to change pending the final rules) to comply with the requirements. For entities formed after the effective date,…
Read MoreSignificant Proposed Changes to Minnesota Veterans Homes Rules
November 17, 2021 | Barna, Guzy & Steffen, Ltd.
By: Cathryn Reher While there has been a great deal of publicity about the ground-breaking ceremonies around the state for additional Minnesota Veterans Homes, far less publicized are the 88 pages of proposed changes to the Minnesota Rules. These proposed changes will impact both veterans and their spouses whether they currently reside, or have future plans to reside, at one of these facilities. The current rules can be viewed at: https://link.edgepilot.com/s/1f367ca5/5mJ1ZMz-4kSkcAQfk_IInA?u=https://www.revisor.mn.gov/rules/9050. You will want to check out the proposed rule changes at: https://link.edgepilot.com/s/71a018ff/xz80iGxVIUKb4jigTsKN0w?u=https://mn.gov/mdva/assets/2021-10-15-rd4384_tcm1066-502928.pdf. From an initial review of the proposed rule changes, many are adverse or more restrictive than under the current rules. If you read the MDVA description of the proposed rule changes, you would have no idea what changes are afoot. For instance, one of the proposed changes will impact a current and future facility resident’s holding a real property interest in the form of a life estate. The change adopts a valuation method for a life estate which could result in as much as a twenty to thirty percent increase in the equity value allocated to a Veterans Home resident. If the life estate were sold, the resident’s maintenance charge would increase until the full value of the interest, along with other available assets, was reduced below $3,000. For any persons holding…
Read MoreBusiness Owners: Think Twice Before Gifting Stock to Employees
September 24, 2021 | Carole Clark Isakson
I receive regular calls from small business owners that want to show appreciation to their hardworking employees by gifting shares in the company. Sometimes, the goal is to incentivize an employee to work harder and in other cases, the employer hopes to keep the employee long-term and feels the gift will help with this. I generally dissuade these owners from share transfers and suggest other ways to bonus employees based on profits. Why? Because an owner of shares, no matter how small, has rights in the company that can cause issues for the well-meaning employer. Minority shareholders in Minnesota have a variety of rights. For instance, minority shareholders in privately held corporations have the right to request and examine the share register, the records of all shareholders, and board proceedings over the past three years. This includes all articles, amendments, bylaws currently in effect, certain financial statements, reports made to shareholders within the last three years, names and business addresses of all directors and principal officers, voting trust agreements, shareholder control agreements, and other types of agreements. While providing these documents may not be difficult, many employers would rather not share this information. When an employee comes to their employer, and owns a share in the company, this information must be provided. In…
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