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 Defense Appropriation Act of 2021, Public Law 116-283 (01 January 2021), which empowered the Financial Crimes Enforcement Network (“FinCEN”) to promulgate regulations for the Corporate Transparency Act (“CTA”) was simply a belated gift wrapped in a green ribbon of United States currency for lawyers and accountants. The CTA should keep giving gifts of unintended consequences to non-exempt entities for many years to come. The far-ranging application of the CTA, with only twenty-three exemptions, is likely to apply to over 90 percent of all entities in the United States. FinCEN estimates over 32.5 million entities will register their beneficial ownerships by the end of 2024. This is a great opportunity for law firms and accounting firms to develop, collectively and collegially, CTA compliance programmes for their clients and to educate clients as to the consequences as well as benefits associated with compliance or non-compliance with this new law.
Legal and accounting practitioners should consider requesting (anonymously in most cases) an opinion on their responsibility to inform current clients and past clients of the CTA from their Chair of Supreme Court for Lawyers Advisory Committee(s) or the State Board of Accountancy/Society of CPA(s). Further consideration should be given to professional firms which continue to render professional services if the client has refused to register with FinCEN. Professional firms might take this opportunity to internally close matters after externally dissolving clients. There is no better time to close matters and to counsel clients 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.
Best practices may suggest practitioners consider sending all clients a notification of the CTA with an executive summary, inviting interested clients to seek further professional services to determine their CTA obligation or exemption. Professional firms should consider amending engagement letters to address their scope of responsibility to register with FinCEN, the beneficial ownership of the client, or to exclude this responsibility on behalf of the firm, including the perfect excuse to update engagement letters or encourage engagement letters.
Another best practice may be for professionals to offer clients language obligating members in limited liability companies or shareholders in corporations to abide by CTA compliance provisions by amending their operating agreements, or by amending their corporate by-laws, respectively.
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: +1 314 446 4279
Law Firm Services
