Brown, Moskowitz & Kallen, NJ & NY Attorney News

By Linda R. Brower, Senior Counsel, Commercial Transactions

What Happened

The Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21, 2025 making sweeping changes to the definition of a “reporting company” by removing the requirement to report all entities created in the U.S. and their beneficial owner information (BOI) under the Corporate Transparency Act (the “Act”). U.S. companies and U.S. persons are now exempt from reporting BOI to FinCEN (as well as updating and correcting previously-filed BOI Reports).

Entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”) must still report the BOI of individuals who are citizens of foreign countries to FinCEN but are not required to report any U.S. person as a beneficial owner. Foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from reporting any beneficial owner. The flip-side is also true: U.S. persons are not required to report BOI for any foreign entity for which they are a beneficial owner.

The following requirements apply to foreign entities that must report:

• Reporting companies registered to do business in the U.S. before the March 21, 2025 (the interim final rule’s date of publication) must file BOI Reports no later than 30 days from that date;
• Reporting companies registered to do business in the U.S. on or after March 21, 2025, have 30 calendar days to file an initial BOI Report (measured from the effective date of entity registration).

What’s Next

The interim final rule has been deemed “effective” as of March 21, 2025 but FinCEN will be accepting comments for 60 days, until May 20, 2025. Moreover, FinCEN said that it will further assess whether the current exemptions are appropriate in light of those comments. FinCEN also posted that it intends to issue a final rule “this year.”

BMK will continue to monitor and report on FinCEN’s announcements and all further developments under the Act as they occur.
This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

#corporatetransparencyact #corporatecompliance #mandatoryreporting #legalcompliance #beneficialownershipinformation

By Linda R. Brower, Senior Counsel, Commercial Transactions

What Happened

On February 27, 2025, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it would suspend the March 21, 2025 deadline for mandatory reporting of beneficial ownership information (BOI) under The Corporate Transparency Act (Act) — it had issued the week before. The Release states  “[n]o 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.” FinCEN said it will issue the interim final rule extending the BOI reporting deadlines by no later than March 21, 2025.

Finally, FinCEN announced that later this year it intends to solicit public comments on proposed revisions to the existing BOI reporting requirements. It will consider such comments as part of a notice of proposed rulemaking that it expects to balance the burden on small business while still ensuring that BOI remains useful to national security, intelligence, and law enforcement activities.

BMK continues to monitor and report on FinCEN’s announcements and all further developments under the Act as they occur.

This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

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By Linda R. Brower, Senior Counsel, Commercial Transactions

The Background

Through a complex mix of decisions by different courts between December 26, 2024 and February 18, 2025, including the U.S. Supreme Court, the mandatory reporting of beneficial ownership information pursuant to The Corporate Transparency Act (Act) is once again enforceable and it comes with a new set of mandatory compliance dates.

As of February 18, 2025, there is no longer any ban on enforcement of the Act (except in one case involving a stay of the Act against only the plaintiffs in that case). Full details of prior court actions involving the Act are available by referencing BMK’s News Alerts on this subject. Here we detail the expedient information business owners need to comply with current legal requirements.

Next Steps

Pursuant to an “Alert” updated February 19, 2025 on the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN)’s website, reporting under the Act’s Beneficial Ownership Information (BOI) Reporting Rule is now subject to the following compliance deadlines:

1. Most reporting companies have until March 21, 2025, to file an initial, updated and/or corrected BOI report.
2. Reporting companies previously granted an extension to file beyond March 21, by qualifying for hurricane disaster relief for example, must file an initial BOI Report by the later deadline.
3. Reporting companies formed or registered on or after February 18, 2025, have thirty (30) from the date of creation or registration to file an initial BOI Report.

Three interesting items to note. FinCEN stated that it will be assessing its options to further modify these deadlines during the 30-day period ending on March 21 “in keeping with [its] commitment to reducing regulatory burdens on businesses” and “prioritizing reporting for those entities that pose the most significant national security risks.” Further, FinCEN stated its intention to “initiate a process” by which it would revise the BOI Reporting Rule to reduce the “burden for lower-risk entities, including many U.S. small businesses.”

Lastly, on February 10, the U.S. House of Representatives passed unanimously the Protect Small Businesses from Excessive Paperwork Act (H.R. 736) with a 408-0 vote. Under that bill, existing entities that are “a small business concern” as defined under 15 U.S.C. §632 and formed or registered before January 1, 2024, would have until January 1, 2026, to submit reports about their beneficial owners to FinCEN. The next day, the Senate introduced a companion bill for consideration by the Senate.

This continues to be a fluid situation. BMK will monitor and report on further developments under the Act as they occur.

This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

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Brown Moskowitz & Kallen, P.C. recently represented two New Jersey-based accounting firms in their sales to a private equity-backed strategic acquirer. The sellers are full-service accounting and advisory practices with broad client bases.

The transactions were consummated utilizing the AICPA alternative practice structure. Going forward, the sellers will operate under a single entity while retaining their leadership teams and benefiting from the extended resources and back-office support of the purchaser.

Stuart M. Brown, Partner and Co-Chair of the Commercial Transactions practice, and Justin Escher Alpert, Senior Counsel, represented the accounting firms.

Brown Moskowitz & Kallen has brought business acumen to legal representation for more than 25 years, leading complex mergers and acquisitions for privately held clients with local, national, and international business interests.

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Brown Moskowitz & Kallen Partners Stuart Brown and Norman Kallen are the latest guests on the Business Unchained podcast hosted by Bobby Mascia.

Episode Highlights:

What does it take to turn a business deal into a true success story? In the world of mergers and acquisitions (M&A), the stakes are high, and the challenges are many—especially for family-owned businesses and middle-market companies.

In this episode of Business Unchained, host Bobby Mascia sits down with Stuart Brown and Norman Kallen, co-founders of Brown Moskowitz & Kallen, a law firm specializing in mergers and acquisitions (M&A). With nearly 26 years of experience working together, their firm has become a trusted name in connecting buyers and sellers of middle-market businesses valued between $50 million and $100 million.

Here’s a link to the episode on YouTube: https://lnkd.in/eJgkYp8P

Brown Moskowitz & Kallen, P.C. recently represented SAFE-COM Wireless LLC, a New Jersey-based designer and manufacturer of mission-critical distributed antenna and sensor systems, in its sale to RATH™ Communications, a subsidiary of AVIRE, a global leader in emergency communication and safety solutions, with locations in Europe, North America, and Australia.

Based in Holmdel, New Jersey, SAFE-COM Wireless designs and manufactures Emergency Responder Communication Enhancement Systems (ERCES). Their innovative solutions, such as bi-directional amplifiers and fiber optic distributed antenna systems, play a critical role in keeping first responders connected during emergencies. SAFE-COM Wireless attenuators enable local police and other first responders to communicate with a property in an active crisis via the most integrated in-building radio communications and sensor systems ever introduced, elevating response safety. As part of RATH™ Communications, the strategic acquisition of SAFE-COM Wireless enhances AVIRE’s comprehensive range of emergency communication solutions and strengthens its service to customers across North America.

Stuart M. Brown, Partner and Co-Chair of the Commercial Transactions practice, and Justin Escher Alpert, Senior Counsel, represented SAFE-COM Wireless in the transaction.

Brown Moskowitz & Kallen has brought business acumen to legal representation for more than 25 years, leading complex mergers and acquisitions for privately held clients with local, national, and international business interests.

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By Linda R. Brower, Esq., Senior Counsel, Commercial Transactions

What Happened

In the same week, the Fifth Circuit Court of Appeals both lifted, and then reinstated, the temporary injunction halting enforcement of The Corporate Transparency Act (Act) and its reporting requirements.

On December 23, 2024, a three-judge panel (the “motion panel”) of the Fifth Circuit Court of Appeals granted the government’s emergency motion to reverse a lower District Court’s decision to impose a nationwide injunction against enforcement of the Act. The motion panel held that the government had met its burden to demonstrate the likelihood of success on the merits that the Act is constitutional. As a result of this decision, the government immediately extended the reporting deadlines under the Act for a brief period, adjusting most of them to January 13, 2025.

At the same time, the plaintiffs in the underlying case petitioned the same appellate court for an emergency hearing en banc – a hearing by a panel consisting of a greater number of judges (a “merits panel”). Plaintiffs asked the merits panel to reverse the decision lifting the injunction made by the motion panel.

On December 26, 2024, the merits panel did just that. It reversed the decision of the motion panel, the effect of which was to reimpose the nationwide “pause” in enforcing the Act and to suspend the new reporting deadlines for all reporting entities under the Act. The merits panel said it was reimposing the injunction to “preserve the constitutional status quo” so that the Fifth Circuit Court would have sufficient time to consider the parties’ “weighty substantive arguments.” The merits panel decided that forcing plaintiffs to comply with the Act now would unfairly prejudice their claims, even if they were to ultimately lose on the merits of their claims. Thus, for now, the government is enjoined from enforcing the Act and there are no reporting deadlines in place. Voluntary reporting under the Act continues to be permitted and has never been halted at any time during consideration of the issues by the prior courts in the case.

The Fifth Circuit has set an expedited briefing and hearing schedule in the case for early in 2025. Oral argument is now scheduled for March 25, 2025, after which the Fifth Circuit appellate court will issue its final decision on the constitutionality of the Act.

What’s Next

Currently, there is no obligation for reporting companies to report under the Act. This applies to all reporting under the Act, not just the filing of initial reports. Therefore, regardless of when a reporting company was formed, no initial, updated or corrected reports have to be filed now.

Reporting companies should continue to monitor the News section of the BMK website for information and updates about the status of the underlying case in the Fifth Circuit Court of Appeals as well as for updates about the Act and its reporting requirements. We will continue to monitor developments under the Act and report on them as they occur.

This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

By Linda R. Brower, Esq., Senior Counsel, Commercial Transactions

What Happened

On December 23, 2024, the Fifth Circuit Court of Appeals lifted the preliminary injunction imposed by a U.S. District Court in Texas earlier in the month that had stopped all required reporting under The Corporate Transparency Act (the Act).

On December 3, 2024, a U.S. District Court in Texas, in a first-of-its-kind ruling under the Act, issued a nationwide preliminary injunction “pausing” all mandatory reporting by reporting companies under the Act, after finding that plaintiffs in the case had demonstrated a likelihood that the Act was unconstitutional.

The Department of Justice (DOJ) took an emergency appeal to the Fifth Circuit Court, requesting an emergency stay of the lower court’s injunction order pending a final decision of the merits of the case which could take months or longer to resolve. After an expedited briefing schedule, the Fifth Circuit Court lifted the injunction against enforcement of the Act on December 23, 2024, finding that the DOJ had met its burden to demonstrate the likelihood of success on the merits that the Act is constitutional.

What’s Next

Immediately following the decision by the Fifth Circuit Court of Appeals, FinCEN issued a Press Release and a revised schedule for entities subject to the Act to file their required Beneficial Ownership Information Reports (BOI Report).

FinCEN issued the following information and filing extensions for initial BOI Reports:

• For reporting companies existing prior to January 1, 2024, the filing deadline is now January 13, 2025, instead of January 1, 2025;
• Reporting companies created or registered in the United States on or after September 4, 2024, that had an initial filing deadline between December 3, 2024 and December 23, 2024, now have until January 13, 2025, to file their initial BOI Reports;
• 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 their initial BOI Reports;
• Reporting companies that qualify for disaster relief may have extended deadlines that fall after January 13, 2025, and their initial filing deadline is now extended to whichever deadline is later;
• Reporting companies that are created or registered in the United States on or after January 1, 2025, have 30 days to file their initial BOI Reports (after receiving actual or public notice of effective creation or registration).

The Press Release did not address reporting companies that are created or registered in the United States on or after December 24, 2024 through December 31, 2024. Accordingly, we presume that these companies should report within 90 days of the notice of effective formation/registration in accordance with the Act’s original reporting requirements.

No extension was announced for entities formed on or after January 1, 2025. These reporting companies will have 30 days from notice of effective formation/registration to file initial BOI Reports in accordance with the Act’s original reporting requirements.

For further information about the Act and its reporting requirements, please refer to the News and Resources sections of our website. We will continue to monitor developments under the Act and report on them as they occur.

This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

By Linda R. Brower, Esq., Senior Counsel, Commercial Transactions

The Background

The BMK Corporate Group has previously written in this space about The Corporate Transparency Act (the Act) as a topic of interest to clients and friends of the firm. We write now to update you regarding a new development under the Act and its reporting requirements — specifically, the Beneficial Ownership Information Reporting Rule (BOI Reporting Rule.

Recall that the Act was intended to expose, and thus deter, shell companies engaged in illegal activities, including terrorist financing, money laundering and tax fraud. The Act requires that companies subject to the Act and their “beneficial owners” must report sensitive information, including names, addresses, birthdays and drivers’ license or passport identification numbers.

What Happened

On December 3, 2024, in a first-of-its kind ruling under the Act, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction “pausing” the reporting requirements for all reporting companies (not just plaintiffs in the case).  The result of the ruling is to prohibit the federal government from continuing to enforce the Act and its BOI Reporting Rule until further court action stays, overturns or modifies the injunction.

The Texas federal district court determined that the plaintiffs in the case had demonstrated the likelihood that they would prevail on the merits of their claims that the Act was unconstitutional and exceeded Congress’s power to enact. The U.S. Department of Justice (DOJ) already filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit on December 5, 2024.  The  DOJ’s first move will likely be to seek a stay of the lower court’s preliminary injunction (and let the BOI Reports continue to be filed) while the DOJ appeals to the Fifth Circuit on the merits of the case on an expedited basis (i.e., to allow for an expedited hearing on the parties’ opposing contentions).

What This Means For Reporting Companies

In short, at least for now, companies that are subject to the Act and the BOI Reporting Rule are not required to submit beneficial ownership reports to FinCEN. For those companies subject to the Act that have not yet filed an Initial Report, it would be best to continue to be prepared to file the BOI Report. It is still possible that pre-2024 reporting companies will be required to file by the original deadline of January 1, 2025.  The FinCEN reporting portal is still open and accepting BOI Reports for filing.

For pre-2024 reporting companies that have already filed initial BOI Reports, monitor the media for reports that the information submitted in initial BOI Reports is going to change. It is certainly in line with FinCEN’s responsibility that it will be issuing further guidance to reporting companies in the extremely near future on this subject.

This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.

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Friends and family members routinely loan each other money — at times considerable sums of money — for working capital or for other needs on the basis that the trusted borrower will repay the loan as soon as he or she is able to do so. A recent New Jersey Appellate Division decision has affirmed that these informal loans are enforceable in New Jersey.

Brown Moskowitz & Kallen’s Kenneth L. Moskowitz and Michele-Lee Shapiro recently represented a lender who made a pay-when-able loan in a very substantial amount to a close friend who was in desperate need of funds to keep his diverse business interests afloat. In August 2023, on plaintiff-lender’s action to enforce repayment of the loan, a Bergen County Superior Court entered Final Judgment in favor of the plaintiff. The trial court held that pay-when-able loans are legally enforceable in New Jersey and that the plaintiff’s cause of action accrued when the defendant admitted to plaintiff his ability to repay the loan. The trial court’s 63-page opinion was replete with findings that the defendant’s testimony was not credible, and the court rejected all of defendants’ arguments seeking to avoid repayment of the loan.

On November 19, 2024, the New Jersey Appellate Division affirmed the Superior Court’s decision in a unanimous opinion, holding that pay-when-able loans are “valid and enforceable in New Jersey.” The appellate court affirmed the trial court’s enforcement of plaintiff’s pay-when-able loan.

Should you have any questions concerning pay-when-able loans or other business disputes, we would be happy to speak with you at any time.

Kenneth L. Moskowitz is the Chair of the Litigation Department at BMK, and Michele-Lee Shapiro is Senior Counsel in the firm’s litigation group. Ken and Michele-Lee represent clients in a broad range of business disputes in state and federal courts, as well as in arbitration.