Please join us in welcoming Mr. Zachary Hobbs to SWB. Zach is a corporate and construction litigation associate attorney helping businesses navigate complex legal disputes. A Texas A&M University and Baylor Law School graduate, he combines strategic advocacy with a results-driven approach to protect his clients’ interests in and out of the courtroom. Welcome, Zach!
A majority of people think that estate planning documents, such as trusts, are only for high-wealth individuals or families. As such, they might not often think about creating a trust, but there are still several reasons why having one could be beneficial, even on a smaller scale. Here are a few:
Ultimately, a Trust can provide peace of mind for individuals, regardless of income, knowing their wishes will be honored and their assets protected. Our Estate Planning experts at Saunders, Walsh & Beard look forward to discussing this with you. To see what type of Trust would be best for your situation, give us a call today.
Please join us in welcoming Mr. Omar Alahmady, an experienced civil litigation attorney, to SWB. With a strong background in litigation, Mr. Alahmady assists both individuals and businesses in navigating complex legal challenges, always striving to provide practical and effective solutions. Whether representing clients in high-stakes disputes or offering strategic litigation guidance, he is dedicated to safeguarding clients’ interests, minimizing risks, and achieving the best possible results. Welcome, Omar!
We are thrilled to announce that Chapman Bauerlein has been promoted to Partner at Saunders, Walsh & Beard. This significant achievement is a testament to his hard work, dedication, and exceptional legal skills he has consistently demonstrated since joining the firm.
Chapman joined Saunders, Walsh & Beard in 2019 and quickly established himself as a valuable member of the team through his ability to tackle complex cases with confidence and expertise. Over the years, he has built a reputation for his client-centered approach and solution-oriented mindset.
In 2023, Chapman was recognized as a Texas Rising Star in Business Litigation by Super Lawyers magazine—an honor that highlights his standing among the top up-and-coming lawyers in Texas. This accolade reflects his legal acumen and commitment to achieving favorable outcomes for his clients. Chapman’s promotion is not just a personal milestone; it represents the values of excellence and teamwork that Saunders, Walsh & Beard embodies.
Please join us in congratulating Chapman on this well-deserved promotion! We look forward to seeing all the great things he will accomplish in this new role.
The TL;DR of FinCEN BOIR: On December 27, 2024, the requirement of the FinCEN BOIR is on hold. Stay tuned.
UPDATE December 27, 2024, the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction, meaning the Corporate Transparency Act (CTA) filing requirements have been reinstated and most filings will now be due January 13, 2025 instead of the December 31, 2024 prior deadline. However, a Fifth Circuit panel has reinstated a nationwide injunction blocking enforcement of the Corporate Transparency Act, three days after a different panel lifted it.
UPDATE December 26, 2024: On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction, meaning the Corporate Transparency Act (CTA) filing requirements have been reinstated and most filings will now be due January 13, 2025 instead of the December 31, 2024 prior deadline.
UPDATE December 3, 2024: In Texas Top Cop Shop v Garland et al. (case 4:24-cv-00478 December 3, 2024), the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA), questioning its constitutionality and its impact on small businesses. This means that if you have not yet completed the FinCEN Beneficial Ownership Information Report (“BOIR”), you do not need to do so at this time. However, please be aware that this ruling may be overturned in subsequent proceedings so be aware that while the requirement is suspended at this time, it may be revived in time to come.”
In 2021, Congress passed a new law affecting most businesses called the Corporate Transparency Act (CTA). Unfortunately, the majority of corporations and LLCs are unaware of this new regulation, which could lead to significant penalties as early as January 1, 2025.
The CTA’s purpose is to create business ownership transparency by identifying individuals who have either direct or indirect ownership (beneficial ownership) in a company. The overall goal is to alleviate fraudulent and illegal activities. The Financial Crimes Enforcement Network (FinCEN) began accepting Beneficial Ownership Information Reports (BOIR) through their website in January 2024.
States such as Delaware and Wyoming do not require corporations nor LLC’s to identify the owners of the entities, allowing for anonymity of said individuals. Congress views this as a potential threat to national security, as such secrecy could allow for foreign individuals or companies to acquire land or business interests that could potentially be against the interests of the nation or in violation of our laws.
Note that any information filed with FinCEN through a BOIR is not publicly available and the FinCEN database is private and for government use only. That being said, if you’ve created your entity in a state such as Texas, said information is public record through your filing with the Texas Secretary of State, as Texas requires entities to list all of its owners, regardless of their percentage.
Any reporting entity created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOIR. If you created your entity in 2023 or 1983, you have until December 31, 2024, to file your BOIR.
Entities created or registered in 2024 have 90 days from their registration to file this information, and those created or registered after January 1, 2025, will have only 30 days to file. So, if you create a reporting entity, such as a for-profit corporation, in early December of 2024, you will have until early March of 2025. However, if you create a reporting entity in late January of 2025, you will also have until early March of 2025 to report.
A beneficial owner anyone who directly or indirectly exercises substantial control over or owns or controls at least 25% interest in a business.
To clarify, an individual exercises substantial control over a reporting company if they fall into any of the following categories: a) If the individual is a senior officer; b) if the individual has authority to appoint or remove certain officers or a majority of directors; c) if the individual is an important decision-maker; d) if the individual has any other form of substantial control, or; e) if an individual has 25% ownership of the entity, regardless of how much or how little control they have as to the operations and management of the reporting company.
An entity may need to report information about its beneficial owners if it is a corporation, a limited liability company, or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Tribal jurisdiction; or if it is a foreign company registered to do business in any U.S. state or Tribal jurisdiction by such a filing.
Not all entities are deemed “reporting entities,” as they are required to state and/or federal regulations that require the reporting of beneficial ownership. These exempt entities include, but are not limited to accounting firms, banks, brokers/securities dealers, credit unions, governmental authorities, insurance companies, investments companies and advisors, public utilities, tax-exempt entities, and venture capital fund advisors. A good rule of thumb is that if your entity reports to a regulating agency, the odds are more likely that you could be exempt from the BOIR requirement. Saunders, Walsh & Beard recommends that you verify your entity is exempt before making any assumption.
When an entity is completing their BOIR, it is required to provide basic information for itself and all beneficial owners. The reporting entity must provide its legal name, trade names, address, jurisdiction of registration, and its taxpayer identification number. Beneficial owners must provide their name, date of birth, residential address, and an identifying number from an identification document such as a passport or driver’s license. As any entity from a multi-million-dollar corporation to a sole-owned LLC must file their BOIR, the information required by FinCEN is nothing complex or intricate, but it is still imperative that said information is filed by the deadline.
As a business owner, you might have received mailings from third parties charging $500 or more for them to file the BOIR on your behalf, but most BOIRs can be completed within 15 minutes by the business owner(s).
A failure to file may become extremely costly, with civil penalties starting at $500 per day and criminal penalties of up to $10,000 and/or two years in prison. You can file the BOIR online at https://www.fincen.gov/boi or mail in a hard copy of the report. Once the report is filed, it only needs to be updated if there is a change in ownership, or a change in any of the other information provided in the report, such as a change in the address of a beneficial owner.
While the government has not effectively informed the public of this new requirement and there is pending litigation stemming from such, we strongly encourage you to file before your entity’s deadline.
At Saunders, Walsh & Beard we are always happy to assist you with any of your business needs, governmental compliance, or otherwise. If you have any questions about this new requirement or if you have any other business issues, please do not hesitate to contact us to speak with one of our transactional law professionals.
