Anthony J. Soukenik
by Anthony J. Soukenik
Anthony J. Soukenik is a Shareholder of Sandberg Phoenix & von Gontard and has previously served on the firm’s Executive Committee. Tony is a member of the Business Law Practice Group and a former Practice Group Leader. He focuses his practice on the areas of banking, construction, real estate, corporate law, durable medical equipment, estate planning, real estate, and federal and state taxation. Contact Tony.
The adoption of the Defense Appropriations Act of 2021, Public Law 116-283 (01 January 2021) will be applicable to the clients of most law and accounting firms. According to the Financial Crimes Enforcement Network (“FinCEN”), approximately 32.5 million corporations, limited liability companies, limited partnerships, and other entities are expected to file their first reports of beneficial ownership in 2024. When non-employer businesses are taken into account, the share of US businesses with fewer than 20 workers increases to 98 percent (US Census Bureau). The Corporate Transparency Act (CTA) requires registration of the beneficial owners unless the company is one of twenty-three exemptions (31 C.F.R. § 1010.380 (c)(2)).
Failure to comply with the CTA is a felony with fines up to USD 10,000 or two years in jail. There is no other bank secrecy act as draconian and boundless at the CTA, surpassing, in jail time and applicability exponentially, the Report of Foreign Bank and Financial Accounts (“FBAR”). In addition to the timely updating of their registrations, clients will be looking for culpable parties to blame for their lack of compliance in registering beneficial owners.
At the GGI BDM PG presentation in Nassau in January 2023, we expounded on this opportunity for lawyers and accountants to advise their existing clients of the requirements for filing with FinCEN before 31 December 2024. Most of the twenty-three exemptions are readily apparent by their nature – for example, banks, credit unions, and public utilities; however, the exemption of large operating companies is more analytical (31 C.F.R. § 1010.380 (c)(2)(xx)) and is defined as companies employing more than twenty employees on a full-time basis in the United States and with over USD 5 million dollars in gross receipts or sales reported on a previous year’s federal income tax return. Clients, annually, will have to be vigilant whether or not they are exempt, and if they are not exempt, they will have to be further vigilant as to the compliance of the registration of the beneficial owners.
Professional firms should embrace this opportunity to consider offering their clients a range of professional services from succession planning to simple dissolution of an entity. There is no other law in the US in modern times that has more applicability to most entities, with significant consequences for failure to meet compliance requirements. There is no better time to close matters and to dissolve inactive entities (another exemption) 31 C.F.R. § 1010.380(c)(2); requiring 1) existence of more than one year; 2) not engaged in active business; 3) not owned by a foreign person; 4) has not in the preceding 12-month period had a change in ownership, or sent or received funds in an amount greater than USD 1,000; and 5) does not hold any assets.
With more than 175 attorneys across seven offices, Sandberg Phoenix & von Gontard’s work is concentrated in the areas of business, business litigation, intangible property, health law and products liability. They stand behind their promise to provide superior client service with a rare client service guarantee, reflecting their commitment to quality and broad depth of legal expertise.
GGI member firmSandberg Phoenix & von Gontard P.C.Clayton (MO), St Louis (MO), St Charles (MO), Kansas City (MO), Edwardsville (IL), O’Fallon (IL), Gainesville (FL), USAT: +1 314 231 3332
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