business & corporate law attorney

We work with residential & commercial real estate

Business Advice
Legal Counsel

Business Start-Ups
Contracts and Documents
Maintaining Your Company
Buying Or Selling A Company
Disputes and Negotiation

LEDFORD & ASSOCIATES

Understanding How
Michigan Business Law Works

Need help understanding how Michigan business law works, and whether you should consider hiring a business law attorney?

If you are a business owner– small, medium, or large – or an individual or commercial business owner, our Grand Rapids business lawyers can provide you with representation and service in business law to meet your specific needs, as we understand that every single business’s needs are unique. Our business lawyer will promote the protection of your business, and minimize risk of liability in the event of a claim or dispute.

Many general practice law firms in Grand Rapids have lawyers with business law backgrounds, but not the practical business skills you’ll find at Ledford & Associates. We understand your needs and focus on your goals as we help you start a new business, prepare a contract or negotiate a dispute. Our corporate law attorneys are ready to assist you in every aspect of your business.

Our Services Include

Business Start-Ups

We can:

Incorporate a new Michigan company
Entity choice and formation: C corps, S corps, LLCs, LLPs, partnerships, and sole proprietorships
Draft Shareholder and Partnership Agreements
Update an incorporation that you did on your own
Compile a corporate minute book

Contracts and Documents

We draft or review:

Service contracts to use with your clients or customers
Employment contracts for your employees
Joint venture, non-disclosure, confidentiality and other business agreements
Commercial leases

Maintaining your Company

We handle:

Changes to your company’s records e.g. change of directors, address, etc.
Alterations to your company’s share structure
Issue or transfer of shares
Changes to partnerships e.g. new partners, termination of a partner
Succession Planning
Trademarking your logo and/or service mark

Buying, Selling Or Merging A Company

We assist with:

Drafting or reviewing a letter of intent
Preparing or reviewing purchase, sale and merger plans and agreements
Conducting due diligence
Buying or selling a Franchise
Preparing closing documents and facilitating the transfer of funds

Incorporated Professionals

We can:

Incorporate a new professional corporation
Assist with the application to the relevant regulatory body
Ensure company Articles comply with bylaws or statutory requirements
Prepare Practice, Office sharing or Management Agreements

Disputes and Negotiation

We will:

Provide advice if you are involved in a dispute related to your business
Assist with the negotiation of a settlement

Beneficial Ownership Information (BOI) Reporting Requirements

The Corporate Transparency Act (CTA), part of the Anti-Money Laundering Act of 2020, established new beneficial ownership information (BOI) reporting requirements to enhance financial transparency and combat illicit financial activities. The rule is implemented by the Financial Crimes Enforcement Network (FinCEN) under the U.S. Department of the Treasury.

Here’s an overview of the reporting requirements, focusing on small businesses:

Who Must Report?

1. Reporting Companies

Domestic Entities: Corporations, limited liability companies (LLCs), or other entities created by filing a document with a state or tribal authority.
Foreign Entities: Entities registered to do business in the United States.

2. Exemptions - There are 23 exemptions, including:

Large operating companies (with 20+ employees, $5M+ revenue, and a physical U.S. office).
Certain regulated entities (e.g., banks, credit unions, investment companies).
Nonprofits, tax-exempt entities, and certain inactive businesses.

When Must Reports Be Filed?

1. Existing Companies (Before January 1, 2024)

Must file BOI reports by January 1, 2025

2. Newly Formed or Registered Companies (On or After January 1, 2024)

Must file BOI reports within 90 days of formation or registration or within 30 days of formation or registration if created after January 1, 2025

3. Updates to BOI:

Changes in beneficial ownership or company information must be reported within 30 days of the change.

How to File?

Reports will be submitted electronically to FinCEN via a secure portal.
FinCEN is responsible for safeguarding the reported information, ensuring its use is limited to authorized purposes (e.g., law enforcement, national security)

Penalties for Noncompliance

1. Civil Penalties:

Up to $500 per day for willful failure to report or update information.

2. Criminal Penalties:

Fines up to $10,000 and/or imprisonment for up to 2 years for knowingly submitting false or fraudulent information.

Key Considerations for Small Businesses

1. Compliance Burden:

Small businesses, especially sole proprietors and partnerships without filing requirements, are likely exempt unless they operate as a corporation or LLC.

2. Awareness of Reporting Obligations:

Small businesses should consult legal or tax professionals to determine if they must comply with the BOI reporting rules.

3. Costs of Compliance:

Compliance may require legal assistance to properly identify beneficial owners and prepare the necessary filings

4. Data Privacy Concerns

FinCEN must secure the reported information, but small businesses should understand how their data will be used and protected.

Impact of BOI Reporting

1. Improved Transparency:

The CTA aims to deter the misuse of shell companies for illegal activities by creating a database of beneficial ownership.

2. Administrative Challenges:

Some small businesses may face challenges navigating the reporting process, especially those unfamiliar with legal or regulatory requirements.

3. Global Implications:

Aligns U.S. practices with international anti-money laundering standards.

In summary, the BOI reporting requirements primarily apply to small businesses structured as corporations or LLCs, ensuring that the ownership and control of these entities are transparent to authorities. While exempt entities are spared the reporting burden, compliance is mandatory for eligible companies, requiring accurate and timely disclosure of beneficial ownership details.

Ledford & Associates will collect and file the information required for your BOI Reporting for a small flat fee. If you are an existing required Reporting Company, please contact Paul Ledford ASAP to bring your company into compliance with this new regulation.