What Business Owners Need to Know About the Corporate Transparency Act

The Corporate Transparency Act isn’t just for corporations. This law requires many small businesses (“Reporting Companies”) to report information about the ownership of their company to FinCen, and it has steep penalties for not complying.

Most LLCs need to comply with these requirements. Some sole proprietorships and partnerships need to comply as well.

Reporting Companies Must Report Beneficial Ownership Information.

It requires Reporting Companies, including most LLCs, to report information on anyone who has “a significant ownership interest” in the company. Having a “significant ownership interest” includes owning at least 25% in the company or having “substantial control” over the reporting company. If a non-owner reports the information on your company’s behalf, they may also need to report their information.

What Needs to Be Reported.

Every business subject to this law must provide their business name, any names they do business under, addresses, jurisdiction the business is registered in, and their Tax Identification Number.

Beneficial owners must report the following information:

-       Name

-       Address

-       Birthday

-       Driver’s License, State Identification, or Passport Number

-       Jurisdiction/State of Identification Documents

You NEED to Regularly Update This Information.

Importantly, businesses will need to update their filings pretty much as soon as anything changes, personally and in the business. This includes updating your personal address, legal name changes, changes of ownership, changes in business address, and changes in your business name. If anything at all changes in your business or even in your personal life, it’s important to evaluate whether you need to make any changes to your BOI filing.

The Penalties for Not Complying.

Noncompliance could land you in hot water civilly and criminally, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including  imprisonment for up to two years and/or a fine of up to $10,000.

When You Need to File.

If you formed your company prior to January 1, 2024, you have until January 1, 2025 to comply. If you formed your company on or after January 1, 2024, you need to file within 90 days of the date you formed your company. 

If you form your company in 2025, you will have 30 days from the date you formed your company to file your BOI report.

If there are any changes to any of the reporting information, you must update your filing to reflect those changes withing 30 days of those changes. These include but aren't limited to:

-       Any change in the information reported

-       Name changes (business and personal)

-       Address changes (business and personal)

-       Identification changes (including renewals)

-       Death of an owner

-       Changes in ownership

Because of the stiff penalties associated with failure to properly complete or update your BOI filing, we highly recommend having an experienced attorney assist you with your BOI filings and giving an attorney a call every time there is an update with your business, whether that’s personally, through a change in ownership, or change in the structure of your business.

For more information on the reporting requirements, check out FinCen’s Guide here.

If you need help navigating your BOI filing with FinCen, book your discovery call below.

Different Ways to Handle Intellectual Property Rights in Your Contracts:

If you forget your intellectual property terms, or worse, don’t understand your IP terms in your online business contracts, you’re most likely not protecting your rights over your creations and creative assets.

Here are 7 important things to think about when dealing with IP terms in your contracts:

1. IP Ownership Clause:

Clearly state who owns what intellectual property created under the contract. Specify whether the intellectual property rights belong to you, the client, the vendor, or if they are shared jointly. This needs to be clear, specific, and easy to understand.

For example, if you’re a photographer, you would want to specify who owns the rights to what photos. Often, photographers retain ownership of all the photos and license the right to use the final, edited versions of the photos to their clients.

2. License Agreement and Usage Rights:

If you're granting someone else permission to use your intellectual property, i.e. giving them a “license” to use it, you need to define the scope of the license clearly and specifically.

Make sure you clearly explain how, when, and where they can use the work, and don’t forget to specifically state any restrictions on their use, like whether they can edit or manipulate the work. This can help prevent misunderstandings and disputes over the IP’s permitted uses.

Don’t forget to explain when the license will be transferred as well. One strategy is to not allow transfer of the license (or permission to use your IP) until full payment is received.

3. Confidentiality:

Make sure you have confidentiality clauses in your contract that protect your sensitive intellectual property. For example, if you’re sharing your proprietary processes or materials with your client during the project, you need to have a clause that informs them they can’t share those processes or materials outside the scope of services you’re providing.

4. Indemnification:

You also need to include properly written provisions that hold the other party responsible for any claims of infringement of IP rights. If written correctly, these clauses will require your client to defend you and pay any of your costs if you’re sued for misuse or unauthorized use of someone else’s intellectual property.

5. Assignment Clause:

Don’t forget to explain whether the intellectual property rights under the contract can be transferred to another party. This prevents unexpected changes in ownership and ensures clarity regarding rights.

6. Dispute Resolution:

Make sure you include provisions that allow the parties to have a little more control in the event of a legal dispute. Generally, in your contracts, you can require the parties to go to mediation before filing a lawsuit and pick where disputes need to be brought. There are also other dispute resolution strategies that can help expedite resolution and minimize legal costs of both parties.

7. Termination Clause:

Determine whether any licenses granted will continue after termination and under what conditions. Also make sure you specify whether any IP needs to be returned to you after termination.

These are just some of the strategies to protect your company’s intellectual property, and the strategy for your business will depend on a variety of factors.

Because of this, there’s no one-size-fits-all approach to legal strategy for your business. That’s why it’s so important to get legal advice from an experienced attorney to help make sure you’re properly protecting your business’ IP rights.

Want to make sure your IP is protected? Let’s chat!

5 Ways to Protect Your Online Business from Lawsuits

In today's fast-paced digital world, it’s even more important to protect your online business from lawsuits. Here are five important strategies to help minimize legal risks and protect your online business:

1. Comprehensive Contracts and Agreements:

Having lawyer-drafted contracts and agreements for all of your business transactions, including with your clients, vendors, employees, collaborators, and contractors is so important. Clear, detailed contracts can help prevent misunderstandings and disputes that can lead to lawsuits.

In fact, contracts don’t just protect your business from lawsuits. Properly-drafted contracts also protect your intellectual property, promote customer trust, and can protect a variety of other business rights.  It’s important to have all your contracts reviewed by your attorney to make sure they actually protect your interests and comply with relevant laws.

2. Website Compliance and Terms of Use:

Make sure your website complies with all relevant laws and regulations, including data protection laws (like the GDPR and CCPA), consumer protection laws, and intellectual property laws.

Make sure your website terms of use, privacy policy, and any required disclaimers or disclosures are clearly spelled out on your website. These documents and disclosures must be easily accessible and prominently displayed near where you collect user information.

Don’t forget to regularly review and update your terms of use and privacy policy to reflect changes in your business practices, legal requirements, and industry standards. We recommend doing this at least quarterly, any time there is a change in your business practices, and when any relevant new laws come about. Your lawyer can help advise you about important updates.

3. Intellectual Property Protection:

Protect your intellectual property rights by having the proper intellectual property terms in your contracts, registering your trademarks, copyrights, and patents for your brand, content, and products.

Respect the intellectual property rights of others and don’t infringe on anyone else’s trademarks, copyrights, or patents. You can do this by running proper searches and not using others’ content without proper permission. Use proper licensing agreements when using third-party content to avoid copyright infringement claims.

Make sure you have the right intellectual property language in all your contracts. This is so important and so often overlooked by business owners.

4. Strong and Appropriate Business Structure:

You also need to choose the right business structure for your company and your company’s long-term goals.

Making sure you have a strong business structure can help protect your personal assets from business liabilities. By separating your personal and business finances and assets, you can limit your personal exposure to lawsuits targeting your business.

Your attorney can help you determine the most appropriate business structure for your business and make sure you’re properly complying with all the formalities.

5. Business Insurance:

Don’t forget to invest in the right business insurance to protect your business against risk and liability. Some key insurance types that apply to online businesses are general liability insurance, professional liability insurance (errors and omissions insurance), product liability insurance, and cyber liability insurance.

As your business evolves, don’t forget to review your insurance policies and adjust your coverage levels to make sure they give your business adequate coverage.

By implementing these measures, you can help protect your online business from potential lawsuits and other legal challenges. However, it's so important to get legal advice from qualified professionals to make sure your business is complying with applicable laws and regulations specific to your industry and jurisdiction.

Need help implementing these strategies? Book your discovery call now.

7 Ways to Leverage Your Intellectual Property as a Valuable Asset

Here are 7 ways to make the most of your trademarks and copyrights:

1. Monetization Through Licensing:

You can license your intellectual property to other businesses or individuals for a fee. This allows them to use, produce, or sell products/services based on your intellectual property while generating revenue for your business. You can also consider offering exclusive licenses to limit competition and increase the value of your IP.

2. Product Development and Innovation:

A strong intellectual property portfolio can make it easier to create new products and improve existing ones by promoting brand awareness and trust, increasing market competition, and potentially opening up new revenue streams.

3. Branding and Marketing:

Brand names, logos, and other trademarks are valuable intellectual property assets. Protecting and consistently them helps build brand recognition and value. Using your intellectual property consistently will also help differentiate your business from competitors and establish a unique identity.

4. Strategic Partnerships and Collaborations:

By partnering and collaborating with other brands, you can expand the reach of your intellectual property.

5. Secure Financing:

Intellectual property can be used as collateral for loans and as an asset in fundraising efforts. It can make your business more attractive to investors, potentially increasing its valuation.

6. Defensive Strategies:

Properly protecting your intellectual property will allow you to enforce your rights to prevent others from using your intellectual property without permission.

7. Market Exclusivity:

Having a strong intellectual property portfolio can provide a competitive advantage by limiting the ability of competitors to replicate your brand and offerings, which is a valuable asset in the market.

Remember to regularly review and update your IP strategy to make sure it still aligns you’re your company as it evolves. Seeking legal advice is essential to ensure that your intellectual property is properly protected and used in compliance with relevant laws and regulations.

Want to know how we can help? Book a discovery call now.

5 Reasons Legal Is Non-Negotiable In Your Business

Establishing a strong legal foundation that protects your company from risk is vital for every business. When done properly, each legal aspect of your company fits together like a puzzle that ultimately protects you, your company, and your brand from risks that could hinder your progress.

1. Your Business Needs to Comply with Applicable Regulations.

Regardless of your industry, there are countless laws and regulations your company needs to comply with. These include safety regulations, data protection laws, tax laws, employment laws, intellectual property laws, federal laws, state laws, and local regulations.

2. Properly Written, Lawyer Drafted Contracts Help Ensure a Smooth Client Experience, Protect Your Company from Disputes, and Minimize Risk.

When properly written, your contracts will protect your company from scope creep, issues with collection, communication delays, unwarranted cancellation requests, and expensive lawsuits. Clearly spelling out the expectations of the parties promotes goodwill between everyone involved and gives them somewhere to look if there’s a disagreement.

3. Having Thorough Intellectual Property Policies and Plans Ensures Trust, Protects Your Company from Infringement Claims, and Builds the Value of Your Company.

Making sure everyone at your company understands the basics of intellectual property law and having policies in place to protect your company from infringement claims is so important in deterring risk and lawsuits. Protecting your company’s creative works, brand name, logo, and other branding elements is equally important in moving your company forward and building its value.

4. Having the Proper Liability Protection in Place Will Protect You and Your Company.

Ensuring you have the right liability protection by putting the right contracts in place, having the proper business structure, and getting business insurance will keep your company moving forward even if you have any legal hiccups.

5. Making Sure You Have a Legal Plan And Regularly Maintaining That Plan Will Protect our Company As It Grows.

Having a legal plan for your company will make it easier to plan for future growth. It will also serve as a guide and allow your business to continually move forward confidently despite any legal issues that come up.

Want to know more? Book a call below to learn more about our Legal Planning Services.