In the latest turn of events, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.

No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.

At this time, we are recommending a wait and see approach to comply with the BOI filing requirements. As always, our office will keep you updated.

Again, the Courts have reversed their position on a stay of the requirement to file beneficial ownership information reports (“BOI’s”).

On December 3, 2024, in the-case of Texas Top Cop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex:), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction to stop the requirement to file BOI reports by December 31, 2024.

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order.  On the basis of the December 23, 2024, ruling, FinCEN extended the deadline to January 13, 2025.

On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024, order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file BOI’s with FinCEN.

As always, we are ready to assist clients in determining whether or not to file BOI’s and to complete any BOI filings that are requested. 

The Fifth Circuit Court of Appeals granted a Department of Justice (DOJ) motion to lift an injunction, suspending the January 1, 2025, deadline to file the beneficial ownership information (BOI) reports, put in place by a district court ruling December 3, 2024, that the DOJ had appealed. 

The deadline for most reporting companies to file beneficial ownership information (BOI) reports was extended to January 13, 2025, by the Financial Crimes Enforcement Network (FinCEN), hours after a Monday court ruling reinstated the reporting requirement. 

After the Fifth Circuit order, FinCEN, which enforces the Corporate Transparency Act (CTA), announced that, for reporting companies that had been required to supply BOI information by January 1, their new filing deadline was January 13, 2025. 

Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file initial BOI reports with FinCEN. 

At this time, our office stands ready to assist in the filing of the BOI reports by those required to do so. In the meantime, we will keep posting updates as they become available.

As we have previously reported, any existing legal entity created or registered to do business in the United States on or after January 1, 2024, has to file beneficial ownership information (BOI Report) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) prior to Wednesday, January 1, 2025, pursuant to the Corporate Transparency Act (CTA). Failure to file timely amend or correct a BOI report with FinCEN subjects the reporting company to potential civil, and in some cases criminal penalties from FinCEN.

On December 3, 2024, U.S. District Judge Amos Mazzant of the Eastern District of Texas turned the CTA and the FinCEN BOI Reporting Rule on their heads, issuing a preliminary injunction that

1. suspends the requirement to file the BOI Report
2. stays the January 1, 2025, compliance deadline
3. declares that “reporting companies need not comply with the January 1, 2025, reporting deadline pending further order of the Court.”

The Court determined that the CTA and the BOI Reporting requirement are likely unconstitutional for purposes of a preliminary injunction. Judge Mazzant added that he has not yet made “an affirmative finding that the CTA and the Reporting requirement are contrary to law or that they amount to a violation of the Constitution.” On the basis of his finding that the CTA and Reporting requirement are likely unconstitutional, however, District Judge Mazzant determined that FinCEN should be enjoined from enforcing the BOI Reporting requirement and that the January 1, 2025, compliance deadline under the BOI Reporting requirement should be stayed.

A NATIONWIDE INJUNCTION

The most surprising part of Judge Mazzant’s order is his determination that the injunction should apply nationwide. Because one of the Plaintiff’s membership interests extended across the country, Judge Mazzant held that the extent of the constitutional violation Plaintiffs alleged was best served through a nationwide preliminary injunction.

As expected, the Defendants, on December 5, 2024, appealed the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit.

The key question, then, is whether the Fifth Circuit will act on this appeal before the BOI Reporting requirement of the January 1, 2025, compliance deadline and if FinCEN will otherwise delay the January 1, 2025, deadline.

Accordingly, we continue to recommend that companies assess their BOI reporting obligations and either voluntarily file their BOI report or at a minimum be ready to report and be in compliance with the CTA requirements should the injunction be listed or revised. We continue to closely monitor the situation and will provide updates as new information becomes available.

Please reach out to Avery, Amanda, Alexa or John with any questions.

Purchasing a business is an exciting undertaking that comes with the promise of growth, independence, and financial rewards. However, it’s important to note that it also comes with complex legal and financial processes. If these are not handled properly, it could lead to significant risks and setbacks.

Whether you are purchasing a small mom-and-pop shop or acquiring a larger company, it’s critical to have an experienced attorney on your side. The attorneys at Colorado Law Group can help ensure that the transaction is successful and protect your long-term interests.

Below, we’ll explore the top 5 reasons you need an attorney when buying a business:

Proper Structuring of Deal

One of the most critical aspects of purchasing a business is determining the proper structure for the transaction. This will impact taxes, liability, and future operations. A business attorney can guide you through these considerations to ensure the deal structure aligns with your financial, tax, and legal goals.

• Asset vs. Stock Purchase: in an asset purchase, specific assets are acquired without the liabilities. In a stock purchase, you take ownership of the entire company including debts and obligations. An attorney can help you weigh the pros and cons of each type depending on your specific situation.
• Tax Implications: The deal structure will also impact your tax obligations. An attorney, along with a tax professional, can help you understand the potential tax consequences and structure the deal to minimize tax liability and maximize your tax basis.
• Organizational Structure: How you structure your ownership of the required business will affect your future tax consequences in the operating of the business.

Thorough Due Diligence

When buying a business, conducting due diligence is one of the most important steps. It involves verification that the business is as represented by the seller, including intellectual property rights, Real Estate rights, legal obligations, and more. An attorney plays a crucial role in this process by:

• Reviewing financial statements: An accountant can analyse the numbers, but an attorney will ensure that the seller represents there are no hidden risks, such as unreported debts, unpaid taxes, or outstanding lawsuits.
• Evaluating legal risks: An attorney can review the legal history of the company including contracts, leases, and employee agreements, to ensure that there are no significant legal liabilities that could impact your ownership.
• Ensuring compliance: An attorney can insure the seller verifies that the business is in compliance with state and federal laws, local ordinances, and industry regulations.

 If you do not conduct proper due diligence, you may unknowingly purchase a business that is financially unstable or legally compromised.

Negotiating Terms of the Purchase Agreement

The purchase agreement is legally binding. It outlines the terms and conditions of the sale, including the purchase price, payment terms, and transfer of assets and liabilities.

It is essential to have an attorney draft, review, or negotiate the purchase agreement because they can:

• Protect your interests: An experienced attorney will ensure that the contract terms are fair and protect your interests. They can address issues such as indemnification clauses, which help protect you from possible legal claims following the sale and non-compete agreements that prevent the seller from starting a competing business in the future.
• Clarify ambiguities: An attorney can ensure that all terms are clearly defined to prevent misunderstandings or disputes in the future.
• Adjust terms in your favor: If certain aspects of the deal are unfavorable, an attorney can negotiate to improve the terms, including adjusting the payment schedule, limiting liabilities, or securing additional warranties from the seller.

If you do not have a thorough legal review, you may sign an agreement that exposes you to unnecessary risks or financial burdens.

Handling Regulatory Requirements and Licenses

Most businesses require various regulations, licenses, and permits, especially if they operate in a highly regulated industry. When buying a business, it is important to make sure that all necessary licenses are transferred and that the business is in compliance with applicable regulations. An attorney can help by:

• Ensuring license transfers: depending on the nature of the business, licenses/permits may need to be transferred or reissued. An attorney can handle this process, ensuring the transition is smooth and there are no operational delays.
• Navigating industry regulations: different industries have unique regulatory requirements. An attorney familiar with your business’s sector can ensure that the purchase doesn’t violate regulatory guidelines/requirements, helping you avoid fines or operational shutdowns.
• Addressing environmental/zoning laws: In some cases, there are zoning laws/environmental regulations to consider. An attorney will ensure compliance with these laws before finalizing the transaction.
• Assessing Intellectual Property: An attorney can ensure you knew what, if any, intellectual property you are acquiring.

If you ignore these regulatory issues, it could lead to costly penalties, license revocations, or even a shutdown of your newly acquired business.

Minimizing Risk and Liability

The primary reason to hire an attorney when buying a business is to minimize risk. Even a well-established business may have hidden dangers, from unresolved lawsuits to undisclosed debts. An attorney can help identify these risks and mitigate them before you finalize the purchase, including:

• Reviewing employment contracts: An attorney will evaluate existing employment contracts, ensuring you are not inheriting unfavorable terms that may lead to future disputes with employees.
• Addressing liabilities: An attorney will ensure that liabilities are properly disclosed and appropriately handled during the sale.
• Limiting exposure: An attorney will reduce your exposure to risks after the sale, whether through negotiating liability limits or indemnification clauses.
• Tax Consequences: An Attorney can assist you in taking advantage of tax benefits in acquiring and operating the business.

When buying a business, an attorney can help safeguard your investment and give you peace of mind as you embark on your new business venture.

Secure Your Business Future: Contact Colorado Law Group Today

In conclusion, purchasing a business is a complex transaction with significant financial and legal implications. An experienced attorney can help ensure that the deal is structured properly, due diligence is thorough, and your interests are protected every step of the way. If you are considering purchasing a business, contact Colorado Law Group to partner with a legal expert.

On July 8, 2024, the Financial Crimes Enforcement Network (“FinCEN”) released an interpretive update to the beneficial ownership information (“BOI”) reporting requirement applying to legal entities that have been dissolved or otherwise ceased to exist after January 1, 2024. Some view this update as expanding the reporting requirement, while others view this interpretation as a clarification on the prior FAQs relating to dissolved or inactive entities.

Prior to the new guidance, FinCEN FAQs stated that the BOI requirements applied to entities that qualified as inactive entities for reporting purposes if they were formed prior to January 1, 2020. This guidance was not enough to provide clarity on whether a dissolved entity would be required to report, instead providing ambiguity to those businesses that were formed prior to January 1, 2020, but dissolving prior to January 1, 2024.

FinCEN’s interpretive guidance states that any reporting company that was not “formally and irrevocably” dissolved prior to January 1, 2024, must file a BOI report within the deadlines set forth in the requirements. This requirement includes business that may have ceased conducting business, hold zero assets, or be administratively dissolved. For a company to be considered non-existent, it must have “formally and irrevocably” dissolved, which typically involves filing dissolution paperwork, receiving confirmation of dissolution, paying related taxes or fees, ceasing business operations, and liquidating assets. Administrative dissolution or suspension is not enough for an entity to be considered “ceasing to exist” as a legal entity unless it becomes permanent.

Still unsure if your business is required to report?

Colorado Law Group is here to answer any questions you have regarding your business, and any reporting requirements. Colorado Law Group has become your one stop shop for all business-related legal questions, and our Business Compliance Solutions program specializes in your state and federal reporting requirements. Please call today for a consultation with one of our experienced business attorneys.

Mediation is a process where a neutral third party, known as the mediator, helps disputing parties to negotiate and resolve their conflicts. Key aspects of mediation include its voluntary nature, confidentiality (except where disclosure is required by law or safety concerns), and the focus on empowering parties to actively participate in finding solutions. It is often used in various contexts, including family disputes, workplace conflicts, commercial disputes, and civil matters, as an alternative to litigation.

How mediation works

Opening Statements

The mediator introduces themselves and explains the mediation process. Each party gets a chance to explain their side of the story without interruption.

Joint Discussion

The mediator may facilitate a discussion where both parties can directly communicate their concerns, feelings, and perspectives. This helps in clarifying misunderstandings and identifying common ground.

Private Sessions (Caucuses)

The mediator may meet privately with each party to discuss confidential concerns, provide reality checks, and explore potential solutions. This allows parties to express themselves more freely and explore settlement options.

Negotiation

The mediator assists in generating and evaluating options for resolution. They may facilitate compromises and help parties consider alternatives to reach an agreement that both find acceptable.

Agreement

If an agreement is reached, the mediator helps draft a written agreement outlining the terms. This agreement is voluntary and can cover various aspects of the dispute, such as financial matters, future interactions, and any other relevant issues.

Closure

Once the agreement is drafted and signed by both parties, the mediation process concludes. The mediator may follow up to ensure compliance with the terms of the agreement, depending on the circumstances.

Choosing the right law firm

Navigating the mediation process can be challenging, but partnering with an experienced law firm like Colorado Law Group can make all the difference. The attorneys at Colorado Law Group understand the process of mediation and are committed to protecting your interests throughout every stage.

Trust our experienced attorneys to provide the personalized legal representation and unwavering support you need to achieve the best possible outcome in your case. Contact Colorado Law Group today for a consultation and let our legal expertise guide you through the complex litigation landscape.

The commercial eviction process in Colorado can be complex and challenging for both landlords and tenants. Understanding the pitfalls associated with this process is crucial for both parties to protect their rights and navigate the legal system effectively.

Pitfalls of the Commercial Eviction Process

One of the major pitfalls of the commercial eviction process in Colorado is the strict adherence to legal procedures and timelines. Colorado law sets forth specific requirements that landlords must follow when evicting a commercial tenant.  A simple example is strict adherence to notice provisions contained in the lease concerning default and/or termination, which often include the ability of a tenant to cure such alleged violation(s).  Failure to comply with notice and other requirements can result in the eviction being delayed or even dismissed by the court.  Even worse, a landlord’s failure to abide by lease provisions could cause it to be sued for breach of contract.

Another pitfall of the commercial eviction process in Colorado is the potential for costly litigation. Evicting a commercial tenant can be a lengthy and expensive process, especially if the tenant decides to contest the eviction in court. Legal fees, court costs, and lost rental income during the litigation process can add up quickly, putting a financial strain on both landlords and tenants.

Additionally, the commercial eviction process in Colorado can be emotionally challenging for both landlords and tenants. Landlords may feel frustrated by tenants who refuse to vacate the premises or fail to pay rent, while tenants may feel overwhelmed by the prospect of losing their business location. It is important for both parties to maintain open lines of communication and seek legal advice if needed to navigate this process effectively.

In conclusion, the commercial eviction process in Colorado presents several pitfalls for both landlords and tenants, including strict legal requirements, costly litigation, and emotional challenges. By understanding these pitfalls and seeking legal guidance when necessary, both parties can protect their rights and interests throughout the eviction process.

Choosing the right law firm

Navigating the complexities of litigation law can be challenging, but partnering with an experienced law firm like Colorado Law Group can make all the difference. Colorado Law Group understands the intricacies of litigation and is committed to protecting your interests throughout every stage of the legal process.

Trust our experienced attorneys to provide the personalized legal representation and unwavering support you need to achieve the best possible outcome in your case. Don’t face litigation alone—contact Colorado Law Group today for a consultation and let our legal expertise guide you through the complex litigation landscape.

What does this mean for you and your business?

We are here to help.

Please also note the following warning posted by FinCEN: 

Litigation refers to the process of resolving disputes or conflicts between parties through the court system. It involves bringing a legal action before a court, which then adjudicates the matter based on applicable laws and evidence presented by both sides. Litigation typically encompasses various stages, including filing of the lawsuit, pre-trial procedures such as discovery (exchanging evidence), trial, and potentially appeals if either party is dissatisfied with the outcome. The goal of litigation is to obtain a resolution to the dispute, often in the form of a court judgment or settlement agreement.

The importance of an experienced litigation lawyer

Having an experienced litigation lawyer on your side is vital as they can guide you through every step of the legal process. An experienced attorney can help you evaluate the strengths and weaknesses of your case, advise you on different legal strategies, and represent your interests in court. Additionally, a skilled litigator will assist in gathering crucial evidence, negotiating settlements, and ensuring your rights are protected throughout the process.

Stages of the litigation process typically include:

Pre-Litigation

This stage involves attempts to resolve the dispute before filing a lawsuit. It may include negotiation, mediation, or arbitration.

Pleadings

The formal initiation of a lawsuit begins with the filing of a complaint by the plaintiff, which sets forth the legal and factual basis for the claim. The defendant then responds with an answer, admitting or denying the allegations and asserting any defenses. In some cases the defendant may file a motion to dismiss prior to filing an answer.

Discovery

This stage involves the exchange of information and evidence between the parties. Discovery methods may include requests for documents, written interrogatories, depositions (sworn testimony outside of court), and requests for admission.

Pre-Trial Motions

Before trial, either party may file motions to resolve legal issues or disputes that arise during the litigation process. Common pre-trial motions include motions to dismiss, motions for summary judgment, and motions to exclude evidence.

Trial

If the case does not settle, it proceeds to trial. During the trial, both parties present their arguments and evidence to a judge or jury, who then decides the outcome of the case based on the applicable law and the evidence presented.

Post-Trial Motions

After trial, either party may file post-trial motions, such as motions for a new trial or motions challenging the judgment.

Appeals

If a party is dissatisfied with the outcome of the trial or post-trial motions, they may appeal the decision to a higher court. The appellate court reviews the trial court’s decision for legal errors and may affirm, reverse, or remand the case for further proceedings.

Enforcement

If a judgment is obtained, the prevailing party may take steps to enforce the judgment, such as garnishing wages or placing liens on property owned by the losing party.

These stages may vary depending on the complexity of the case, the jurisdiction, and other factors.

Choosing the right law firm

Navigating the complexities of litigation law can be challenging, but partnering with an experienced law firm like Colorado Law Group can make all the difference. The attorneys at Colorado Law Group understand the intricacies of litigation and are committed to protecting your interests throughout every stage of the legal process. 

Trust our experienced attorneys to provide the personalized legal representation and unwavering support you need to achieve the best possible outcome in your case. Don’t face litigation alone, contact Colorado Law Group today for a consultation and let our legal expertise guide you through the complex litigation landscape.