From its office in Clayton, Missouri, Danna McKitrick, P.C., delivers legal representation to new and growing businesses, financial institutions, non-profit and government-related entities, business owners, individuals, and families throughout the greater St. Louis region and the Midwest.
Danna McKitrick attorneys practice across many areas of law, both industry- and service-oriented.
To help combat money laundering, prevent financing of terrorism and drug and human trafficking, and deter securities fraud among other illicit activities, January 1, 2024, will usher in the new reporting requirements for most small and closely held businesses. Courtesy of the Corporate Transparency Act (CTA) established under the Anti-Money Laundering Act of 2020, companies will be required to disclose beneficial ownership information to the Treasury Department’s Financial Crimes and Enforcement Network (FinCEN).
What does this mean for existing entities?
All domestic corporations, limited liability companies, and other entities created under state law and formed prior to January 1, 2024, will have until December 31, 2024, to report the required information to FinCEN.
Because the CTA aims to garner information on shell companies and entities with no or little operations, it provides 23 exemptions allowing an entity not to report. One such exemption is for operating companies that meet the following requirements: (1) employ more than 20 full-time employees in the U.S., (2) had more than $5,000,000 in gross receipts or sales as reported on the prior year’s IRS Form 1120, and (3) have an operating presence at a physical office in the U.S.
What does this mean for new entities?
New entities created on or after January 1, 2024, will have 30 days from actual notice of creation or after a secretary of state provides public notice of the entity’s creation or registration, whichever is earlier, to file the required reporting information.
Whose information is reported?
Individuals who directly or indirectly exercise substantial control over the entity, senior officials who have substantial control over a company, and individuals who own or control 25% or more of ownership interests are the Beneficial Owners who must disclose required information under the CTA.
What kind of information do Beneficial Owners have to report?Continue reading »
Authored by Ruth Binger with assistance from Sarah L. Ayers, contributor
Trademarks are a vital aspect of intellectual property, offering unique proprietary rights with several advantages. Unlike other forms of property, a brand or trademark can remain valuable indefinitely with proper care. In fact, trademarks tend to increase in value with use. They can be sold or licensed, making them reasonably liquid assets. Additionally, trademarks serve as powerful marketing shortcuts, influencing consumer purchasing decisions for a company’s goods or services.
However, there are misconceptions surrounding the protection trademarks provide. Incorporating, qualifying to do business, or reserving the business name with various Secretary of State offices provides limited brand name protection. The right to exclude others from using a similar name on goods and services is not automatically granted. Conduct a thorough trademark search of any new corporation or LLC name used to identify a product or service to determine the availability of a mark for your specific purposes and ensure the name does not infringe on another entity’s trademark.
Trademark registration is not mandatory to establish a protectable and exclusive right to a mark. Registered trademark remedies are injunctions and damages, but often the only remedy for an unregistered mark is an injunction. Under common law, trademark rights can be obtained within a specific geographic area of use. State trademark registration does not offer protection beyond these rights. Continue reading »
With any new technology, fortunes can be made or lost depending on where you fall in the adoption curve. The internet, the dot-com bubble, smartphones, apps, and social media are perfect examples of technological advances that have shaped the world and left many kicking themselves for not investing in the idea when they first heard about it. Now many ask if the Bitcoin, crypto, and blockchain buzzwords they hear are the next opportunity to get in early and gain wealth. Blockchain and Bitcoin have been around for over 14 years, yet only an estimated 13-16% of Americans have owned crypto. Does this leave an opportunity to still “get in early”? Possibly, as there can be expanded use of technology beyond “currency.”
However, many still don’t fully understand the technology and it is important to be cautious when entering unfamiliar waters. As with other technologies that excelled, there are plenty that never took off or went bust like Laserdisc or Zune. The other concern is when technology becomes obsolete like VHS, DVD, and Blu-ray. This is not to say you must be an expert in space before becoming involved. I am not a mechanic, pilot, or doctor, but I still actively drive a car, fly, and take medicine without fully understanding the technology. As with anything, it is important to exercise due diligence before putting money into anything new and understand potential risks. We trust in many things because of either government regulation or incentives for private business to ensure it works properly.
In brief, the blockchain underlying most crypto is a digital ledger kept by numerous decentralized computers which solve formulas to validate the authenticity of transactions and add them to “blocks” on the chain. This ledger is secure due to the large number of independent sources validating each transaction and maintaining the chain which may be reviewed at any time by anyone. This concept of decentralization is what helped drive its popularity following the great recession of 2008 and why some feel it can be trusted due to it not being under the control of one entity or government.
Crypto regulation has been slow to be adopted and this has led to, although warranted, perceived risks. There are numerous types of crypto and as with the dot-com bubble, there are some that are busts or shams. Continue reading »
Understanding contracts is essential for a small business. Contracts are the basic building block of our economy and the legal principles of contract formation and enforcement go back centuries but are still in effect today.
Contracts require a “meeting of the minds” between the contracting parties and are enforceable in our courts. Contracts need to be clear and unambiguous and should be in writing and signed by the parties. In certain cases, oral contracts are enforceable but without a writing the terms are very hard to prove. For this reason, business contracts should always be in writing. The basic principle of contract interpretation by the courts is to determine what is the intention of the parties as determined by the four corners of the written document. Deals may be sealed with a handshake but fade away without a written document.
Contracts also require consideration to be enforceable. Consideration means that the parties exchange mutual promises or that one party agrees to provide a benefit to the other party or agrees to accept a detriment in consideration for the contract. A promise to make a gift is not enforceable because the receiving party has made no promise, payment or other consideration to the gifting party.
Under the Uniform Electronic Transactions Act (UETA), contracts can be signed electronically by using systems such as DocuSign as long as the parties intend to sign and do business electronically and keep a record that can be stored and reproduced as a copy. All states have adopted the UETA, including Missouri (codified at Section 432.200 RS MO 2003). Electronic contracts are just as enforceable as traditional signed contracts. Thus, it is important to note that the same basic principles of contract formation, interpretation and rules of enforcement apply to contracts in electronic or digital form. Continue reading »
While the national real estate landscape is evolving and somewhat unsettled for commercial office space, industrial real estate is in high demand. This reflects a shift in the need for logistics and manufacturing as well as employers seeking alternate and hybrid office settings. Traditional office and industrial leasing share many of the same key terms, including pricing, common area expenses, and operational costs. However, there are additional and unique considerations for industrial landlords and tenants.
One key consideration is the appropriateness of the facility for the tenant’s use. Industrial tenants often have substantially different use needs from other industrial tenants, based upon the tenant’s industry and operations. This includes the possibility of vastly different needs in terms of transportation and loading facilities, HVAC and ventilation, floor loads, the use of data centers, and power needs.
Tenants also need to ensure that the zoning is appropriate for their needs (light vs. heavy industrial) and that there is flexibility in the lease and the facility for the tenant’s possible evolving needs over the term of the lease.
Both landlords and tenants should also consider the burden and expense of removing industrial fixtures like mezzanines, cabling, and cranes and the lease should clearly allocate these responsibilities and costs between the parties. This may require discussions about specific financial considerations to ensure the availability of funds to de-mobilize a site at lease end, including guaranties and letters of credit. Continue reading »
Over the last two years, research has found between 13-16% of Americans have at one time owned cryptocurrency. This falls squarely into the Early Adopters Category and is approaching Early Majority. While many are still skeptical of cryptocurrency, the underlying technology is likely here to stay due to the multitude of uses beyond cryptocurrency.
The history of crypto and blockchain began when a white paper was released in 2008 by the pseudonym Satoshi Nakamoto which laid out the concept of bitcoin and the underlying blockchain which made it functional. While the code and formulas that run blockchain are far too complex for this article, the concept boils down to this: Blockchain is a digital ledger kept by numerous decentralized computers which solve formulas to validate the authenticity of transactions and add them to “blocks” on the chain. This ledger is secure due to the large number of independent sources validating each transaction and maintaining the chain which may be reviewed at any time by anyone. Continue reading »
Most small businesses owners have borrowed money to start and grow their businesses and, in most cases, had been requested by the lender to personally guarantee those debts. Sometimes the lender also requires the spouse to guarantee the debt, even if the spouse has nothing to do with the business.
In a loan context, a guarantee is a promise to pay the debt if the borrower is unable to do so.
In a business loan context, a personal guarantee is the promise of an individual, often the business owner, to pay the debt if the business is unable to do so.
Why is it important to pay attention to these personal guarantees?
Because starting and growing a small business is risky. If the startup fails, the personal guarantor is on the hook for those debts. All of the guarantor’s assets can be seized by the creditor once it obtains a judgment against the guarantor.
Why is it important to pay attention to a request that the spouse guarantee the debt?
Because when in Missouri a husband and wife own an asset together, such as a home or joint bank account, it is said to be owned as “Tenants by the Entirety” or TBE. In Illinois, TBE ownership is limited to homes owned by married couples.
TBE ownership is different than joint ownership. If two owners of an asset aren’t married, creditors of only one owner can reach that owner’s interest in the asset. With TBE ownership, however, only creditors of both owners can reach the asset. Obviously, it is to the business owner’s advantage not to have the spouse on the guarantee. This prevents the lender from seizing the jointly owned asset should the business fail.
Federal law protects a lender from demanding a spouse’s signature unless the spouse is a partner, director, or officer of the business or a shareholder or member. Regulation B, a provision of the Equal Credit Opportunity Act, provides that a lender cannot demand the signature of a spouse who is not involved in the business if the applicant qualifies for credit without the spouse’s guarantee and the spouse is not a joint applicant. Before your spouse signs any loan documents, be sure to consult with your attorney to ensure that a spousal signature is not required.
Should your business fail, and the lender tries to enforce the guarantee, your attorney should review the loan documents to determine if you have any defenses to the guarantee. For instance, a lender cannot enforce an “embedded guarantee,” in which some provision in the loan document itself states that the owner’s signature as a representative of the borrower also serves as a personal guarantee of the loan personally. These are not enforceable.
Because of the risk inherent in signing a personal guarantee, a separate individual signature underneath the terms of the guarantee is required for the guarantee to be effective. This can be either in a separate portion of the loan document or in a stand-alone guarantee document.
Though not a national leader the St. Louis region has historically shown a comparatively healthy and viable level in crypto activity (currencies, blockchain development, digital strategies, development, and sales of digital products). In 2022, Missouri was the 17th ranking state for most crypto aspects. St. Louis was 31st among US. cities in terms of crypto owners per capita.
Crypto’s Present Damaged State
For the approximately 14 years of the existence of the crypto currencies and digital assets, that industry has globally been particularly mysterious and volatile. And, to summarize that history, suffice it to say that the recent bankruptcies in November 2022 of the FTX cryptocurrency exchange and BlockFi, preceded and followed by such volatility and smaller bankruptcies, have caused many to predict the imminent demise of crypto industries.
However, that volatility existed even before the string of bankruptcies occurring in late 2022. And notwithstanding that volatility, many experts believed that the cryptocurrencies and related industries, all of which are dependent on new technologies (mainly blockchain), were an unadulterated boon to the business world, constituting a particularly efficient system of trade and investment unfettered by regulation.
With crypto being relatively unregulated and using new and not-yet-understood methods of trading and transactions (e.g., blockchain and “smart” contracts), the then existing methods of regulation (e.g., anti-fraud, banking, insurance, commodities and securities law) were (probably mistakenly) not seen as applicable. Continue reading »
The widespread impact of the COVID-19 pandemic caused many businesses to evaluate whether they are obligated to perform under certain contracts, or whether they can invoke unique contract provisions to excuse a possible or likely failure to perform. While no business wants to consider a downturn due to another worldwide health or other catastrophe, the last several years have made clear it could happen, and there are ways to minimize losses.
Specifically, a “force majeure” clause is a contract provision that excuses a party’s performance of its obligations under the contract when certain circumstances arise beyond the party’s control, and making performance inadvisable, commercially impracticable, illegal, or impossible. These clauses vary in language and length, but many clauses include events like fire, war, unrest, epidemic or pandemic, famine, or otherwise “acts of God.”
There are examples of businesses seeking to excuse or delay performance due to COVID-19. One such case was Pacific Collective, LLC v. ExxonMobil, in California, in which a developer asked the court to prevent ExxonMobil from selling a property to other buyers, claiming that California’s lockdown during the pandemic was an act of God that prevented the developer from completing the multi-million-dollar property acquisition. Continue reading »
Yes, small businesses need estate plans. Business estate plans determine what happens if the owner can no longer operate the business due to death or disability. A plan must be in place to address either potentially devastating situation.
Businesses with multiple owners commonly use Buy/Sell Agreements for such a plan. These provisions can be inserted into the Operating Agreement if the business is a limited liability Company (LLC) or can be provided in a separate agreement if the business is a corporation or partnership. There are two general forms used:
Buy/Sell Provisions: Remaining owners (whether shareholders, members, or partners) buy the deceased owner’s interest from the estate. A life insurance policy can provide funds for the purchase.
Redemption Agreement: The company buys the deceased owner’s interests from the estate. The remaining owners own the company. Proceeds from the sale go to the estate. This arrangement can also be funded by a life insurance policy.
Because of the tax and legal considerations involved, it is critical that these plans be thought out and planned in advance with the advice and input of the business’ attorney, accountant, and insurance professional.
If no agreement exists, the remaining owners must deal with the deceased owner’s estate, possibly controlled by the spouse, children, or other persons not involved in the business. This can be very disruptive. The business may have to be sold or liquidated to the detriment to all concerned. The value of the business is not passed on to the estate. The remaining owners must deal with a hostile party and potential litigation which could destroy the business.
The loss of an owner can also cause a vacuum in the management of the company. Continue reading »
To help combat money laundering, prevent financing of terrorism and drug and human trafficking, and deter securities fraud among other illicit activities, January 1, 2024, will usher in the new reporting requirements for most small and closely held businesses. Courtesy of the Corporate Transparency Act (CTA) established under the Anti-Money Laundering Act of 2020, companies will be 
Authored by 
With any new technology, fortunes can be made or lost depending on where you fall in the adoption curve. The internet, the dot-com bubble, smartphones, apps, and social media are perfect examples of technological advances that have shaped the world and left many kicking themselves for not investing in the idea when they first heard about it. Now many ask if the Bitcoin, crypto, and blockchain buzzwords they hear are the next opportunity to get in early and gain wealth. Blockchain and Bitcoin have been around for over 14 years, yet only an estimated 13-16% of Americans have owned crypto. Does this leave an opportunity to still “get in early”? Possibly, as there can be expanded use of technology beyond “currency.”
Understanding contracts is essential for a small business. Contracts are the basic building block of our economy and the legal principles of contract formation and enforcement go back centuries but are still in effect today.
While the national real estate landscape is evolving and somewhat unsettled for commercial office space, industrial real estate is in high demand. This reflects a shift in the need for logistics and manufacturing as well as employers seeking alternate and hybrid office settings. Traditional office and industrial leasing share many of the same key terms, including pricing, common area expenses, and operational costs. However, there are additional and unique considerations for industrial landlords and tenants.
As with any new technology, the innovation adoption curve describes the categories of groups involved in the technology at different times. 
Most small businesses owners have borrowed money to start and grow their businesses and, in most cases, had been requested by the lender to personally guarantee those debts. Sometimes the lender also requires the spouse to guarantee the debt, even if the spouse has nothing to do with the business.
Crypto in St. Louis and the Midwest U.S.
The widespread impact of the COVID-19 pandemic caused many businesses to evaluate whether they are obligated to perform under certain contracts, or whether they can invoke unique contract provisions to excuse a possible or likely failure to perform. While no business wants to consider a downturn due to another worldwide health or other catastrophe, the last several years have made clear it could happen, and there are ways to minimize losses.
Yes, small businesses need estate plans. Business estate plans determine what happens if the owner can no longer operate the business due to death or disability. A plan must be in place to address either potentially devastating situation.