Ethical Duties for Lawyers under the CTA: a Podcast

In episode 4 of our Podcast, we talk to Anthony (Tony) Soukenik about the ethical duties lawyers fact under the Corporate Transparency Act.

Tony is a corporate partner with the Missouri-based law firm, Sandberg Phoenix. Tony is leading his firm's efforts to advise clients regarding the CTA and is concerned about the duties lawyers will face under the canons of legal ethics.

In general, a lawyer is obligated to advise a client about their legal duties. Presumably, that would include a client's duties under the CTA.

At the same time, lawyers often take a leading role in forming new entities by filing articles of organization for LLCs and articles of incorporation for new corporations. Under the CTA, a person who is "primarily responsible" for filing these documents is the entity's "company applicant". Entities formed on and after January 1, 2024 will need to identify their company applicant in their beneficial ownership report.

After the entity files its initial beneficial ownership report, the entity will need to file an amendment with FinCEN within 30 calendar days after any change in previously-reported information. That information would include the personal data of the company applicant identified in the company's initial report.

If a lawyer is a company applicant, but later loses that company as a client, is the lawyer ethically obligated to "stay in touch" with the company for CTA purposes? If the lawyer fails to keep the company updated, and the company subsequently fails to file a required amendment to its beneficial ownership report, could the lawyer have failed an ethical duty?

Check out our discussion with Tony Soukenik on these and other topics.

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