Corporate Transparency Act

Five Stories That Matter in Michigan This Week – March 14, 2025

Michigan Federal Court Rules that CTA is Unconstitutional

Shortly after the U.S. Department of Treasury announced a suspension of enforcement the Corporate Transparency Act (CTA), the U.S. District Court of the Western District of Michigan ruled in Small Business Association of Michigan, et al v. Yellen, et. al. that the CTA’s reporting requirements violated the Fourth Amendment of the U.S. Constitution.

Why it Matters: While the ruling applies only to plaintiffs who brought the case (such as members of the Small Business Association of Michigan), it may influence other courts’ considering similar constitutional challenges to the CTA throughout the country.

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Michigan Supreme Court Upholds Victory for Firm’s Client

Fraser Trebilcock attorneys Michael P. Donnelly and Laura S. Faussié successfully represented a fiber optic company before the Michigan Supreme Court. On January 24, 2025, the Court, after hearing oral argument from the parties, denied an application for leave to appeal in a case involving the firm’s client, a fiber optic company, effectively upholding the lower courts’ decisions in the client’s favor. The case addressed whether a fiber optic or other telecommunication company was required to obtain permission from, and pay large fees to, a railroad company before installing fiber optic cables under their tracks located at public crossings.

Why it Matters: In a 5-1 decision, with one justice not participating, the Supreme Court left in place the Michigan Court of Appeals’ ruling that the fiber optic company could proceed with installing underground cables beneath railroad tracks at public road crossings after obtaining necessary municipal permits, without requiring additional permission from or fees to the railroad company. Read more.

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Thaddeus E. Morgan Selected as a Member of Michigan Lawyers Weekly “Hall of Fame Class of 2025”

Fraser Trebilcock Shareholder Thaddeus E. Morgan has been selected as a member of Michigan Lawyers Weekly’s “Hall of Fame Class of 2025.” Mr. Morgan is President of Fraser Trebilcock and has over 30 years of litigation experience in both state and federal courts in a wide variety of areas, including, commercial and business disputes, employment and shareholder litigation, construction, health care, real estate, insurance, and intellectual property. He is a former assistant prosecutor and assistant attorney general.

Why it Matters: This special award recognizes esteemed members of the legal profession who have been in practice for at least 30 years. These lawyers truly are legends, making their mark in the courtroom or the boardroom, in their firms and with community organizations, and with local, state and national bar associations. Read more.

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Michigan Treasury to Distribute Nearly $100 Million from Marijuana Tax

The Michigan Treasury Department announced in February its plan to distribute nearly $100 million to 302 local entities and tribes as part of the Michigan Regulation and Taxation of the Marijuana Act.

Why it Matters: 108 cities, 36 villages, 80 townships, 74 counties, and 4 tribes will receive these payments. According to the state, this means for every licensed store and microbusiness in their respective jurisdiction, they will receive over $58,200.

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Keep Your Michigan Cottage in the Family

The family cottage is a place for fun and relaxation in Michigan. For many, the family cottage becomes the meeting place for generations and where lifelong memories are made. As a result, it’s often the intent of the owner to pass the cottage on to future generations to enjoy. Unfortunately, challenges such as high property taxes and family disputes can prevent that from happening. These obstacles can be overcome through careful cottage succession planning.

Why it Matters: If you own a cottage in Michigan, our Cottage Law team can help you think through the issues and take the actions necessary to create a cottage plan. A cottage plan usually addresses the concerns through the creative use of a limited liability company (LLC) or a trust to own the property. Learn more.

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FinCEN Update: CTA Reporting Requirement Back On

UPDATE: Beneficial Owner Information Reports Due by March 21, 2025 (click here for FinCEN Notice)

February 18, 2025, the United States District Court in Texas that had ordered the injunction that had paused enforcement of the Corporate Transparency Act’s (“CTA”) Beneficial Owner Information Reporting (“BOIR”) requirements has granted the government’s request for a stay of that injunction pending appeal.

This means that FinCEN is authorized to enforce the BOIR requirements, yet again. However, in seeking the stay, government lawyers told the court that:

FinCEN intends to announce that it will extend the compliance deadline for thirty days. During that period, FinCEN intends to assess its potential options to prioritize reporting for those entities that pose the most significant national security risks while providing relief to lower-risk entities.

There is also legislation in Congress that would delay the enforcement of the CTA until January 1, 2026. That legislation unanimously passed the US House Of Representatives and is pending consideration in the US Senate.

Therefore, Reporting Companies, whether in existence prior to January 1, 2025, or created after that date, are advised to monitor this situation, and prepare to file their BOIR within the next thirty days.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions. When it matters in Michigan, we are the trusted legal advisors for businesses and individuals.

Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.

UPDATE: FinCEN – Supreme Court – CTA Injunction

UPDATE: FinCEN has given notice of its appeal in the Smith case: the lawsuit that led to the current nationwide injunction that makes Beneficial Ownership Information (BOI) reporting voluntary under the Corporate Transparency Act (CTA). If the court grants FinCEN’s appeal and lifts the injunction, BOI reporting would again become mandatory. In that event, the government has informed the court that FinCEN plans to implement a 30-day filing extension and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities.”

Given the U.S. Supreme Court’s prior decision to stay a similar injunction in Texas Top Cop Shop Inc., it would not be surprising if the Fifth Circuit Court of Appeals follows suit and grants the government’s request in this matter. But how FinCEN ultimately defines “low-risk entities” remains to be seen.

Therefore, as we have advised for several months, reporting companies should continue monitoring these proceedings, consult with legal counsel, and be prepared to file a BOIR when and if required.

Corporate Transparency Act Update – U.S. Supreme Court Lifts Nationwide Injunction

UPDATE AS OF JANUARY 24, 2025

In response to the Supreme Court’s Order, FinCEN has provided the following guidance:

On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports. (Emphasis added). https://www.fincen.gov/boi

As a result of this guidance, Reporting Companies are advised to continue monitoring the situation and consult with legal counsel to determine next steps.

The United States Supreme Court today, January 23, 2025, granted the government’s request to lift the nationwide injunction that had been preventing enforcement of the Corporate Transparency Act (“CTA”). This continues a period of ping-ponging uncertainty for businesses and similar entities, the result of which is the restoration of the requirement for many companies (mostly small businesses and related entities) to file reports with the Financial Crimes Enforcement Network (FinCEN) disclosing their beneficial owners.

The injunction, originally issued by a U.S. District Court in Texas on December 5, 2024, had halted the CTA’s reporting requirements that were slated to begin on January 1, 2025. Subsequent conflicting orders from the Fifth Circuit Court of Appeals further complicated the matter and delayed the effective date.

What This Means for Businesses

With the injunction lifted, FinCEN can now enforce the CTA’s reporting requirements. “Reporting companies,” which include most small businesses and similar entities in the United States, must file Beneficial Ownership Information Reports (BOIRs) disclosing information about their beneficial owners.

Key Points for Businesses:

Gather Information: Businesses should immediately gather the necessary information about their beneficial owners to prepare for filing.
Consult with Counsel: Entities formed after January 1, 2025, that have not yet filed a BOIR should immediately consult with legal counsel, as they are subject to a 30-day filing deadline.
Filing Deadlines: FinCEN is expected to announce a new filing deadline for existing entities soon.

The lawyers at Fraser Trebilcock are closely monitoring this situation and will provide updates as they become available. We encourage businesses to contact us with any questions or concerns about complying with the CTA’s reporting requirements.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories That Matter in Michigan This Week – January 3, 2025

FinCEN Petitions Supreme Court to Intervene

Why it Matters: For now, the reporting requirement is once again “voluntary” per FinCEN’s guidance, but business owners and others are advised to pay close attention, as a decision by the Supreme Court could come swiftly. And if the injunction is lifted, any extension of the filing deadline is expected to be relatively short in light of the government’s arguments in the Application for a Stay and given the fact that FinCEN’s prior extension provided less than two additional weeks, moving the deadline from January 1, 2025, to January 13, 2025. Read more.

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Court Blocks DOL’s FLSA Salary Threshold Increases Nationwide

A federal district court in Texas recently struck down the Department of Labor’s planned increases to minimum salary requirements for overtime-exempt employees under the FLSA. The ruling invalidates both the July 2024 increase to $43,888 annually and the planned January 2025 increase to $58,656, reverting the federal threshold back to $35,568 per year for employers nationwide.

Why it Matters: The ruling means the lower $35,568 annual salary threshold for determining overtime exemptions for white-collar workers under federal law is again applicable (at least for the time-being). However, employers should continue to monitor potential appeals or new federal rulemaking on this issue.

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Michigan Cannabis Exceeds $276 Million in November ‘24

Cannabis sales surpassed $276 million in November, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $275,478,600.16, while medical sales came in at $884,669.59, totaling $276,363,269.75.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices.

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Michigan to Offer New R&D Tax Credit in 2025

Michigan has approved legislation creating a state income tax credit for qualifying research and development expenses conducted within the state. The credit, established through House Bills 5100 and 5101, will be available to both corporations and pass-through entities beginning January 1, 2025, with qualifying expenses defined according to federal tax standards.

Why it Matters: This new tax incentive provides Michigan businesses with an additional financial benefit for conducting in-state research and development activities, potentially making Michigan more competitive in attracting and retaining innovative companies.

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Fraser Trebilcock Announces 2025 Board of Directors

The Shareholders of Fraser Trebilcock, one of Michigan’s long-established full-service law firms, have re-elected Thaddeus E. Morgan as President of the firm. Shareholder Ryan K. Kauffman was re-elected to the Board of Directors, where he will serve as Vice President & Treasurer. Shareholder Jared A. Roberts was elected to the Board of Directors, where he will serve as Secretary.

Why it Matters: When it matters in Michigan, we are the trusted advisor for businesses and individuals requiring planning and consulting services, or facing legal and regulatory challenges, and our capabilities extend to wherever clients require counsel. The annual election of the Board of Directors allows Fraser Trebilcock to continue its tradition of exceptional client service, dedicated community involvement and professional excellence. Read more.

Related Practice Groups and Professionals

Business & Tax | Robert D. Burgee
Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher

FinCEN Petitions Supreme Court to Intervene

After a week and a half of yo-yoing federal court decisions affecting the implementation of the Corporate Transparency Act’s requirement for businesses and other entities to file Beneficial Owner Information Reports, the government has now petitioned the United States Supreme Court to weigh in. The Application for a Stay of the Injunction comes on the heels of a pair of conflicting decisions from two different panels of the Fifth Circuit Court of Appeals; the first which had (temporarily) revived the reporting requirement, and the second that upheld the lower court’s injunction against the implementation of the reporting requirement.

For now, the reporting requirement is once again “voluntary” per FinCEN’s guidance, but business owners and others are advised to pay close attention, as a decision by the Supreme Court could come swiftly. And if the injunction is lifted, any extension of the filing deadline is expected to be relatively short in light of the government’s arguments in the Application for a Stay and given the fact that FinCEN’s prior extension provided less than two additional weeks, moving the deadline from January 1, 2025, to January 13, 2025.

The lawyers at Fraser Trebilcock will continue to keep a close eye on these and other developments.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories That Matter in Michigan This Week – December 13, 2024

USPTO Announces Fee Increases for 2025

The United States Patent and Trademark Office will implement broad fee increases averaging approximately 7.5% across their services, along with introducing several new fees, effective January 19, 2025.

Why it Matters: These fee increases will impact the cost of protecting intellectual property for Michigan businesses. Businesses should be aware of these pending increases and consider whether to adjust the timing of filings as appropriate.

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FinCEN Motion to Stay

Why it Matters: Businesses and other would-be reporting companies are advised to keep a close eye on these proceedings, as the reporting requirements could be revived and enforcement resumed effective January 1, 2025. If that happens, it could be quite a scramble for the 20+ million reporting companies. Accordingly, FinCEN advises that online the reporting system remains open for “voluntarily” filings. Read more.

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Michigan CRA Publishes October ’24 Data: Average Price Decreases

Per data released by the Cannabis Regulatory Agency (CRA), the average retail price for adult-use sale of an ounce of cannabis in October was $73.99, a decrease from $78.68 in September. This is a decrease from October 2023, where the average price was $97.62.

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Fraser Trebilcock Attorney Robert D. Burgee Selected as a  Member of Michigan Lawyers Weekly ‘Michigan’s Go to Lawyers Power List’

Fraser Trebilcock attorney Robert D. Burgee has been selected as a member of Michigan Lawyers Weekly ‘Michigan’s Go to Lawyers Powers List.’ The ‘Go to Lawyers’ program recognized top lawyers around the state in a given practice area for the second year, with Mr. Burgee being recognized as a 2024 ‘Michigan Go to Lawyer’ for Business Transactions.

Why it Matters: Mr. Burgee serves as Co-Chair of the firm’s Business & Tax Department. With over a decade of experience, Bob is a trusted advisor to businesses owners and entrepreneurs across the State of Michigan. Whether it’s a startup finding its feet, or an established company looking to expand, Bob provides expert counsel on all aspects of business law. Read more.

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Business Education Series: Referral Generation: Avoid Peaks & Valleys in Your Sales Funnel

Every business owner prefers a referral to a cold lead. Referrals have a basis of trust and understanding that makes the sales process simpler to execute and winning easier to achieve. Referrals can’t be generated intentionally however, right? On Tuesday, December 17, Ian Richardson, BBA, CSAP, MCSA, Principal Consultant, Fox & Crow Group LLC & Managing Partner, Richardson & Richardson Consulting, LLC, will discuss how this is incorrect.

Why it Matters: Learn how to structure an intentional referral generation pipeline from existing clients while minimizing the risk of client churn. Three takeaways include preparing conversations with clients, retention efforts for clients who are not ready to refer, and review of how to prepare a referral list for clients. Full information and to register.

Related Practice Groups and Professionals

Intellectual Property | Andrew Martin
Business & Tax | Robert D. Burgee
Cannabis Law | Sean Gallagher

FinCEN Motion to Stay

On Wednesday, December 11, 2024, FinCEN filed its first substantive response to the nationwide injunction ordered by a United States District Court in Texas. The response, a “Motion to Stay Preliminary Injunction Pending Appeal” highlights the time and expense incurred by government in implementing the CTA, including the build out of the online reporting system, community outreach events, and an ad buy in excess of $4.3 million. FinCEN further argues that these efforts have resulted in an “exponential increase” in filed reports, noting that nearly 10 million reports have been filed to date, which is 20 million shy of the estimated number of expected reports.

Businesses and other would-be reporting companies are advised to keep a close eye on these proceedings, as the reporting requirements could be revived and enforcement resumed effective January 1, 2025. If that happens, it could be quite a scramble for the 20+ million reporting companies. Accordingly, FinCEN advises that online the reporting system remains open for “voluntarily” filings.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

FinCEN Issues Alert After Recent Ruling on the Corporate Transparency Act

FinCEN has recently released an update following the Tuesday, December 3, 2024, ruling from a federal judge in Texas issuing an order granting a nationwide preliminary injunction against the federal government’s enforcement of the Corporate Transparency Act (“CTA”).

Below is the alert from FinCEN.

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

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The Corporate Transparency Act plays a vital role in protecting the U.S. and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking, and money laundering.  The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage.

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that: (1) enjoins the CTA, including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically, (2) stays all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.

Texas Top Cop Shop is only one of several cases in which plaintiffs have challenged the CTA that are pending before courts around the country. Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional.

While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories That Matter in Michigan This Week – December 6, 2024

Michigan to Offer New R&D Tax Credit Starting 2025

Why it Matters: This new tax incentive provides Michigan businesses with an additional financial benefit for conducting in-state research and development activities, potentially making Michigan more competitive in attracting and retaining innovative companies.

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Corporate Transparency Act Update – Federal Judge in Texas Issues Nationwide Injunction

On December 3, 2024, a United States District Court Judge in Texas issued a nationwide injunction against the federal government’s enforcement of the Corporate Transparency Act (“CTA”). The law, which mandates extensive new reporting requirements for over 35 million American businesses and other entities, was slated to take full effect in less than a month.

Why it Matters: The government is expected to appeal this ruling and is concurrently contesting challenges to the CTA’s enforcement in at least seven other jurisdictions. The expansive reach of the CTA, coupled with the potential for conflicting judicial opinions, will likely trigger further appeals and could ultimately result in an expedited review by the United States Supreme Court. Businesses and other entities subject to the CTA’s provisions are advised to closely monitor these legal proceedings, as the final outcome will directly impact their reporting obligations. Read more from your Fraser Trebilcock attorney.

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Michigan Cannabis Exceeds $268 Million in October ‘24

Cannabis sales surpassed $266 million in October, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $267,603,528.23, while medical sales came in at $961,844.41, totaling $268,565,372.64.

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Business Education Series: Referral Generation: Avoid Peaks & Valleys in Your Sales Funnel

Why it Matters: Learn how to structure an intentional referral generation pipeline from existing clients while minimizing the risk of client churn. Three takeaways include preparing conversations with clients, retention efforts for clients who are not ready to refer, and review of how to prepare a referral list for clients. Full information and to register.

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Fraser Trebilcock Named a Tier 1 Law Firm in Lansing in Six Practice Areas for 2025

Fraser Trebilcock has received a First Tier ranking in Lansing in six practice areas by U.S. News – Best Lawyers® “Best Law Firms” in 2025. Those practice areas are: Administrative/Regulatory Law, Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law, Commercial Litigation, Environmental Law, Litigation – Labor and Employment, and Utilities Law. In addition to the First Tier ranking in six legal practice areas, Fraser Trebilcock has been named a Tier Two firm in Lansing for four practice areas, and has also been named a Tier Three firm in Lansing for four practice areas. The Tier Two areas are: Closely Held Companies and Family Businesses Law, Litigation – Insurance, Real Estate Law, and Trusts & Estates. The Tier Three areas are: Bet-the-Company Litigation, Corporate Law, Litigation – Construction, and Litigation – Environmental.

Why it Matters: Firms included in the 2025 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal expertise. The 2025 rankings are based on the highest number of participating firms and the highest number of client ballots on record. Receiving a tier designation reflects the highest level of respect a firm has earned among other leading lawyers and clients in the same communities and in the same practice areas for their abilities, their professionalism and their integrity.

Related Practice Groups and Professionals

Business & Tax | Robert D. Burgee
Cannabis Law | Sean Gallagher