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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Tuesday, October 22, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will discuss the Corporate Transparency Act (CTA) and its impact on the M&A process. The panel will explore how the CTA's requirements influence the entire M&A process including entity formation, additional due diligence, post-transaction filings, contractual considerations, and amendments to deal structures and acquisition related agreements.

Faculty

Laurence V. Parker
Partner, Vice-Chair of Corporate Section and Chair of Mergers and Acquisitions Team
Williams Mullen

Drawing on years of experience providing strategic advice throughout the M&A process, Mr. Parker finds creative solutions to complex structures, pricing and legal issues to the benefit of his clients, completing transactions efficiently. He works with clients in multiple industries, including banking & financial services, government contracting, petroleum distribution and marketing, insurance and insurance brokerages and software & technology. Mr. Parker also assists growth companies across multiple industries raise angel, venture or other private capital and enter into exit transactions.

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Dirk W. Andringa
Counsel
Sidley Austin LLP - Germany

Mr. Andringa concentrates his practice in the areas of private equity, venture capital, mergers and acquisitions, leveraged buyouts, dispositions, dividend recapitalizations, restructurings, finance, joint ventures and general corporate representation. His practice also involves international transactions, including acquisitions of multinational companies, acquisitions of foreign subsidiaries and the formation of international joint ventures. Mr. Andringa has represented businesses in a variety of industries, including distribution, infrastructure, construction, manufacturing, technology, business services, food products, life sciences, wholesale and retail. 

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Description

On Jan. 1, 2024, millions of U.S. businesses became subject to the CTA, which requires certain domestic and foreign companies to report specified beneficial ownership information (BOI) within prescribed deadlines to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). There are 23 exemptions to the CTA's reporting requirements. Determining eligibility for an exemption requires a careful review of each entity within the corporate structure and exemptions applicable to one entity may not extend to others.

When initiating an M&A transaction, counsel for both buyers and target entities must perform targeted due diligence to determine whether the CTA applies, identify if any exemptions exist, and ensure CTA compliance throughout the transaction. To avoid potential liability for a target entity's prior failure to comply with the CTA, buyers should ensure that the target entity that is a reporting company has maintained CTA compliance by requesting the target's CTA filings and any related communications with FinCEN and require that the target provide information on corporate structure, ownership, and governance.

In addition to the CTA's reporting requirements and related due diligence, M&A parties will want to consider the CTA's requirements when structuring any newly formed entities. Also, CTA-related provisions may be appropriate for the acquisition and transaction documents, such as rollover agreements, senior officer employment agreements, and LLC/limited partnership/corporation securityholder agreements; particularly with regard to representation and warranties, covenants, and possibly indemnification and closing conditions.

Listen as our authoritative panel reviews the CTA-related issues that arise in M&A deals and provides guidance and tips for ensuring compliance in the context of these transactions.

Outline

  1. CTA overview
    1. Entities subject to the CTA and BOI reporting rule
    2. Purpose of the BOI reporting rule and applicable effective dates
    3. Compliance requirements
    4. Information that must be reported
    5. Deadlines for reporting
  2. Key exemptions from the BOI rule and considerations within the context of M&A transactions
  3. CTA compliance-related steps buyers and sellers should take when contemplating an M&A transaction
  4. CTA's impact on M&A deals
    1. Additional due diligence
    2. Acquisition structures
    3. Buyer's potential liability for target entity's CTA-related violations
    4. CTA-related amendments/adjustments to acquisition and transaction documents
    5. CTA filings required in connection with an acquisition
  5. Key takeaways and practice pointers

Benefits

The panel will address these and other key considerations:

  • What is the BOI reporting rule under the CTA and what is its purpose?
  • What entities are subject to the BOI reporting rule and what are the compliance requirements?
  • What are the key exemptions from the CTA that are commonly encountered in the M&A context?
  • What are the additional CTA-related due diligence considerations?
  • How should M&A acquisition structures and documentation be adjusted to account for CTA-related compliance?