In an effort to combat money laundering and the funding of terrorism in the United States, the U.S. Department of Treasury has implemented the Corporate Transparency Act (“CTA”), which was enacted as part of the Anti-Money Laundering Act of 2020. The CTA is effective January 1, 2024 and will require qualifying companies to report and file certain information with the Financial Crimes Enforcement Network (“FinCEN”). FinCEN plans to store this information in a secure nonpublic database called the Beneficial Ownership Secure System (“BOSS”), however, FinCEN is still developing the infrastructure of this system.

Who Must Report

The CTA requires entities qualifying as “reporting companies” to report the information noted below to FinCEN. Reporting companies are domestic corporations, limited liability companies, or other similar entities (or foreign entities that have filed to do business in the U.S.) that: (1) have 20 or fewer employees, (2) have less than $5,000,000 in gross receipts or sales as reflected in the previous year’s federal tax return, and (3) do not otherwise meet the requirements of one of the exemptions described in the CTA.

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As the response to the coronavirus pandemic continues to evolve, it is imperative that healthcare providers stay informed about the latest legal developments that may affect their practices.

In the middle of a pandemic and with instructions from all levels of government to practice social distancing, visiting your healthcare provider virtually may seem like an obvious choice. And yet, a patchwork of federal and state regulations governing telehealth has complicated such visits.

As just one example, licensure of physicians is on a state-by-state basis. Each state has its own regulations making it difficult to implement a national telemedicine program. Adding to that are limits on physicians being able to treat patients in a state in which they are not licensed, as well as different state drug prescription and privacy laws.

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Traditionally, aspiring entrepreneurs looking for easy, low cost access to capital to fund their start-up businesses had limited means.  Recently, sites such as Kickstarter and GoFundMe provided a platform, but the most companies could offer in exchange for a cash investment was a first look to the particualr product or other creative reward, each of which, however was not stock.

Recognizing in part that access to the capital markets should not be limited to the domain of the few, and in view of the democratizing effect the Internet has had with respect to reaching prospective investors, the Jumpstart Our Business Startups Act (JOBS Act) was enacted in April 2012.  One of the most anticipated parts of the JOBS Act was the rules pertaining to crowdfunding.

Business & Financial Services Shareholders, Robert Anderson and Monica Vir recently authored an article for the New Jersey Law Journal in which they provide an overview of the SEC’s allowance for smaller early-stage companies and start-up businesses to raise money by selling securities to non-accredited investors through qualified intermediaries, more commonly known as crowdfunding.

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