Now that we are in the final quarter of 2024, it is a good idea for all business owners to take a few moments to attend to some company “housekeeping” matters. I’m not talking about the operational side of your business – the sales, services, marketing, product development, plan achievement, innovation, income generation, mission, vision, people, and other attributes and factors that have motivated you to start (if you are a founder) and run your company in the first place – but rather, some of the legal technicalities of maintaining your business that are best to address in a timely fashion, while they are minor matters, rather than waiting for them to possibly mushroom into bigger concerns down the road.

If any of the following things sound familiar, it’s probably because you have heard them from us, or others, previously, even if it may have been a while since you’ve taken a pause to think about them. Consider this article your “wrapping-up-2024-on-a-strong-note” reminder service!

Corporate Transparency Act

We circulated a couple of newsletter articles about this topic in January and March of this year. In a nutshell:

<ul><li>If you formed any new business entity (for example, a limited liability company, corporation, or partnership) during 2024 and did not already file, or cause to be filed, a Beneficial Ownership Information (“BOI”) Report for that entity** with the Financial Crimes Enforcement Network (“FinCEN”, which is a bureau of the U.S. Treasury Department) within 90 days, <span style="text-decoration: underline;>then it is very important that you do so right away. </span>The agency threatens to impose substantial civil penalties – possibly exceeding $500 per day – against anyone who willfully violates the above reporting requirements, and, for ongoing offenders, criminal penalties of up to two years imprisonment and a fine of up to $10,000. <br>[**Assuming your entity is not exempted from this filing requirement. There are exemptions under the Act, but they are very narrow, so most business entities are considered “reporting companies” that are required to file the BOI Report under the Act.]</li></ul>

<ul><li>If you have any business entities that were formed prior to January 1, 2024 and did not already file, or cause to be filed, a BOI Report with FinCEN for each such entity (assuming it is a “reporting company” as discussed in the note above), then the Act requires you to complete this filing by no later than January 1, 2025.</li></ul>

The BOI Report is a one-time filing, not an annual requirement, unless there is any change in the beneficial owner information set forth on a previously filed report, in which case an update must be filed.

There is no filing fee for the BOI Report.

You can prepare and file the BOI Report by yourself or with the assistance of your accountant, or, if you prefer, the attorneys at RKW Law Group will be happy to assist you with this.

Entity Registration and Good Standing

This is a great time of year to take a minute to confirm that all business entities operated by you are current on all annual filings and registration payments, i.e., in “good standing”, in the state(s) in which they are formed and also in all other states where they have been registered to do business as a foreign entity.

In Maryland, for example, this is the time of year in which the SDAT sends out notifications to registered business entities that are delinquent on submitting their annual reports and business personal property returns and paying all outstanding fees and penalties in connection with same, alerting them that forfeiture may result if they do not promptly submit all of these required items. Even if your business entity is registered in a state other than Maryland, and that state’s corporations office does not follow the same annual calendar that Maryland does for processing forfeitures of delinquent business entities, now is still a good time (while you are here reading about this topic) for you to look in quickly on your entity’s status in that jurisdiction, to confirm that everything is fully caught up and paid up and that there is no threat of forfeiture looming on the horizon.

It is far simpler and less costly – not to mention that it helps to ensure that you retain all liability protections you receive with an entity structure and will not be potentially exposed to personal liability arising out of business matters – if you can complete the annual report and payment submissions that are required for your entity in any event, in its state of formation and in all other states in which it is qualified to do business, rather than allowing a forfeiture (that could have been prevented) to occur and then needing to take additional steps, file additional documents, and pay additional fees to get the entity’s existence and/or rights to conduct business reinstated.

As part of the above actions, you should also:

• Consider the states in which your company conducts business, including any developments in 2024 (or prior years) that may have resulted in your company conducting business in a state where it did not do so previously, or discontinuing the conduct of business in a state where it did so previously. In either instance, it may be advisable to file, or to discontinue as the case may be, a registration to conduct business in such state as a foreign entity;
• Confirm that all information in the official state records for your entity’s business mailing address and its registered agent (or, in Maryland, “resident” agent) name and office address information is correct and accurate, and update such information if applicable, in every jurisdiction in which your entity is registered. These may seem like insignificant details, but the fact is that having an outdated name and/or address on file for your entity’s registered/resident agent could cause a consequential delay in your receiving knowledge of matters that could dramatically impact your business, such as service of civil complaints and other legal filings if your entity gets sued, notices relating to any regulatory proceedings commenced against your entity by governmental agencies, or notices from state corporate registration offices that your entity is delinquent in its annual or 2-year reporting requirements and registration fees and is subject to potential forfeiture (as discussed above); and
• Confirm the status of, and renew or otherwise update as applicable, any and all trade name (or fictitious name or “doing business as” name) registrations that you currently have for your business in every state and local filing office where such name (or names) has been registered.

If you would like any assistance from the corporate attorneys at RKW Law Group with any of these entity registration matters, please do not hesitate to contact us!

Other Year-Ending Matters

Of course, the above items are far from a comprehensive year-ending checklist. There are other important things for you to check in on as well. For example, see this RKW article from 2022 that is just as timely, relevant and important now in 2024 as it was when it first appeared then.

Here’s to a strong finish of the year in 2024. The attorneys of RKW Law Group look forward to being part of your continuing success story, now, next year, and beyond!