A new year is upon us and with it comes a variety of new legal changes and challenges. While we don’t have an easy answer to your supply chain or employee recruiting concerns, we can at least keep you apprised of the legal issues that are likely to have the greatest impact on your business in 2022.
Corporate Transparency Act
In 2021, former President Donald Trump signed the Corporate Transparency Act into law. The CTA requires nearly all businesses, other than certain public companies and highly regulated businesses, among other exceptions, to report ownership information to the Financial Crimes Enforcement Network beginning this year and update those reports as needed. The stated purpose of this report is to assist with criminal investigations and allow for improved enforcement of money laundering laws.
The required report must include the name, home address, date of birth and an identification number, such as a Social Security number, of each beneficial owner with at least a 25% ownership interest and anyone who has control of the company.
Determining who has control is less straightforward than it may seem for some businesses. For example, provisions included in voting trusts, bylaws or operating agreements may give technical control over the company to a group of owners who individually own less than 25% of the business.
Businesses also must report who originally formed the company with the Missouri secretary of state. For older businesses that were created when recordkeeping was less detailed, this may prove to be difficult.
For existing companies, the report will be due no later than one year after the regulations are finalized. Regulations are expected to be finalized later this year.
As we are all aware, the pandemic has continued to transform and a multitude of legal challenges against government responses already have been filed. The most wide-reaching and heavily challenged responses stem from executive orders that mandate government contractors and employers with 100 or more employees to require their employees to either be vaccinated or tested on a regular basis, if they are exempt from vaccination. The U.S. Supreme Court heard arguments for and against these mandates on Jan. 7. Questions asked by the justices during these arguments indicate that the court likely will overturn the mandates, though this is far from certain. If these mandates are struck down, we can expect a great many more challenges to other governmental efforts to contain the virus.
President Joe Biden also indicated recently that medical providers could prioritize treatment for COVID-19 conditions based on race. While triage is certainly a complicated matter, hospitals and medical offices should bear in mind that a multitude of other factors, such as the Equal Protection Clause of the U.S. Constitution, state and federal civil rights laws and medical codes of ethics make it very difficult to make race the deciding factor in medical treatment.
Build Back Better Act
Last year, Congress attempted to pass trillions of dollars’ worth of social infrastructure spending. One of the bills, the Infrastructure Investment and Jobs Act of 2021, has become law and the other, the Build Back Better Act, is currently held up in the Senate. The IIJA invests in hard infrastructure, such as roads and bridges. The BBBA contains many drastic changes to tax laws and, if passed, will substantially overhaul the energy sector, education and other parts of the economy. The support for this act is almost entirely divided along party lines. With the lack of sufficient support for the act, and the slew of additional issues facing the country, many of them direct results of the pandemic, it seems very likely the BBBA will die in the Senate.
Federal election laws
While election law isn’t an issue that directly affects most businesses, it is an important topic in Congress for 2022. While Congress is attempting to reform the federal election system, it isn’t likely to focus on other drastic measures that will impact businesses.
Several ballot initiatives seek to have Missouri voters approve recreational marijuana in the November general election. To make it to the ballot, organizers of the initiative will need to collect approximately 170,000 signatures by May 3. Voters approved medical marijuana by an approximately 65% margin in 2018. Given the vastly different politics of Missouri compared with states that have approved recreational marijuana, it is far from certain that voters would approve it. However, organizers are optimistic.
Robert Petrowsky is an associate in the estate planning and transactional practice groups of Carnahan Evans PC. He can be reached at firstname.lastname@example.org.
Read the profiles of this year's honorees.