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  • Writer's pictureDavis Yu

2024 Key Legal Changes for Your Business

December 29, 2023


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As the calendar turns to a new year, it is not just about personal resolutions. Within the legal realm, it is time to adjust to new legislations. For instance, we experienced a significant rise in the minimum wage, now at $16 per hour. Additionally, there is a mandate for businesses to ensure that signs on single-user restrooms reflect their accessibility to people of all genders, as per AB 783. Another key update is the restriction placed on employers in California; employers are now barred from creating or trying to enforce non-compete agreements with their employees, which are considered void by state law. This holds true even if such agreements were signed or enacted in other states, according to SB 699 and AB 1076. 

 

Turning our attention to the broader scope of U.S. corporate regulations set to take effect on January 1, 2024, we encounter the U.S. Corporate Transparency Act (CTA). This Act introduces requirements for certain businesses, labeled as "reporting companies," requiring them to disclose detailed information about their "beneficial owners" to the Financial Crimes Enforcement Network (FinCEN). 

 

A "Reporting Company" includes both domestic and international business entities that are registered to operate within any state or jurisdiction, having submitted the necessary paperwork to a secretary of state or comparable authority. Those reporting companies that are not listed under an exemption will need to adhere to the CTA's reporting mandates. Exemptions are granted to entities already subjected to extensive federal reporting obligations, including public companies, financial institutions, investment entities, and other specified organizations. 


Additionally, "large operating companies" are also exempt. Such companies are defined as enterprises employing more than 20 full-time employees in the United States, maintaining a physical office domestically, and reporting annual gross receipts or sales surpassing $5 million from activities within the United States. 

 

The focus of the CTA is to deter and detect financial crimes by preventing the misuse of business entities, like shell corporations, from money laundering or other malicious activities. This Act particularly impacts small to medium-sized businesses that do not fall under the exempt categories. 

 

For reporting companies established before January 1, 2024, these companies must submit an initial report to FinCEN by January 1, 2025. For those formed post-January 1, 2024, the initial report is due within 30 days of their establishment. 

 

Beneficial owners, defined as individuals holding considerable influence over the company or owning a substantial stake, must be disclosed in these reports. This includes those with at least a 25% stake in the business, whether through equity, stocks, voting rights, or other financial interests. 

 

Despite the grace period extending one year for the initial reporting, we strongly suggest tackling this obligation without delay to prevent any oversights or postponements. Noncompliance or providing false information carries the risk of severe civil and criminal repercussions, including fines or even imprisonment. This underscores the critical nature of adhering to the CTA's reporting demands. 

 

In light of these changes, we encourage you to connect with us to discuss your business objectives for 2024. Let's ensure that your business not only meets its targets but also stays in line with the latest legal requirements. Contact us today, and let us support your business by keeping your company's compliance and growth at the forefront. 



This article is intended for informational purposes only. This article does not constitute legal advice. For specific questions related to this article, please contact an attorney. Please note that, while this article accurately describes applicable law on the subject covered at the time of its writing, the law may continue to develop with the passage of time. Accordingly, before relying upon this article, care should be taken to verify that the law described herein has not changed.

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