Focus on S Corporations, Part 3: Tax Implications and Special Considerations in S Corp Acquisitions
Acquiring a business can be a strategic move to grow, diversify, or compete in the market. Acquisition also involves significant tax implications that can affect the value and structure of the deal. Therefore, it is crucial for buyers and sellers to understand the tax consequences of different types of acquisitions and plan accordingly. In Part 3 of PilieroMazza’s blog series “Focus on S Corporations,” we highlight key elements of an S Corp acquisition that buyers and sellers should address to . . . Read More
Focus on S Corporations, Part 2: Inadvertent Termination of S Corporation Elections
The IRS recently provided guidance addressing inadvertent terminations of S Corporation (S Corp) status based on existing provisions in corporate documents that remain after a company makes an S Corp election. This can be a complex legal task that aims to harmonize documents for clarity and consistency in their interpretation and application. In this Part 2 of the blog series “Focus on S Corporations,” PilieroMazza offers guidance to businesses on how to make corrections after an S Corp election to . . . Read More
Focus on S Corporations, Part 1: Choosing the Right Entity to Meet Your Small Business Goals
Most business owners understand the need to create an entity to operate their business. However, beyond general knowledge, many owners are unsure of when is the right time to create an entity and which type of entity makes sense for their business goals. These choices are complex and vary for each type of business. This is the first in a series of blogs focused on S Corporations (S Corps) where attorneys in PilieroMazza ’s Corporate & Organizational Governance Team explore different S Corp entity types, their . . . Read More
The Corporate Transparency Act: Updates, Requirements, and Enforcement for Small Businesses
The Corporate Transparency Act (CTA) has been a hot topic for small business owners since its inception. As we approach its effective date on January 1, 2024, it’s crucial to understand CTA’s implications for small businesses. Below, attorneys in PilieroMazza ’s Business & Transactions Group offer guidance to small business owners and their senior officers on CTA compliance and potential criminal and monetary penalties for failure to report information required by the CTA. PilieroMazza attorneys will also present “Understanding the Corporate Transparency Act: Implications and . . . Read More
Focus on SBA’s SBIC Program, Part 3: Demystifying the Intricacies of the SBIC Application Process
The Small Business Investment Company (SBIC) program is emerging as a powerful financial tool for small business government contractors seeking a transformative approach to financing and growth. This third blog in the series “Focus on SBA’s SBIC Program” demystifies the intricate SBIC application process and reveals strategic benefits associated with obtaining an SBIC license. Small business government contractors should familiarize themselves with the application process to unlock new avenues of capital to foster their success. Please visit this link for Part . . . Read More
Operating Agreement Drafting Considerations: Removal of a Member
When establishing a multi-member limited liability company, it is important to plan for the worst. It may seem cynical to think about the end before the beginning, but every company has a half-life. And while relationships at the outset of any venture are typically strong, it often becomes necessary to remove or dissociate a member who is negatively impacting those relationships—or even the business. If no protection is built into the organizational documents, the members’ recourse is limited to circumstances . . . Read More
Ratification of Defective Corporate Actions Under the Virginia Stock Corporation Act
In 2019, the Commonwealth of Virginia adopted a variety of amendments to the Virginia Stock Corporation Act (VSCA). While many of those amendments are already effective, some of the amendments will go into effect on July 1, 2021, including those addressing how a corporation may ratify defective corporation actions. These new provisions provide corporations with vital tools to ensure that actions taken by the corporation, which might otherwise be found to be void or voidable under Virginia law, are valid . . . Read More
5 Fundamentals of the Corporate Transparency Act: Impacts on Small Businesses
On January 1, 2021, Congress enacted the 2021 National Defense Authorization Act. In an effort to strengthen the fight against money laundering and the funding of terrorist activities, it included broad amendments to the U.S. Anti-Money Laundering Act, the most significant of which was the Corporate Transparency Act (CTA). The CTA will greatly impact the way businesses are formed and how they operate, and it will require regular reporting practices that businesses need to prepare for before the CTA takes effect. Below are . . . Read More
Federal Trade Commission Updates HSR Thresholds
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act) requires that certain mergers, acquisitions, and joint ventures be cleared by the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) if they exceed certain valuation and monetary thresholds. If your transaction exceeds the HSR thresholds, and therefore requires antitrust scrutiny, this can materially alter the structure and timing of the proposed transaction. Pursuant to the HSR Act, the FTC is required annually to . . . Read More
SBA Provides Direction for PPP Round Deux Loans and Second Draw Loans
On January 6, 2021, the Small Business Administration (SBA) issued its first round of formal guidance for the new Paycheck Protection Program (PPP) and the second-draw PPP loans, which we first discussed here . SBA also gave some indication of plans for the second round of the PPP. SBA’s guidance can be found here for the next phase of PPP and here for the second-draw program. Below are key updates for businesses that need access to this important source of relief funding. As . . . Read More