The Corporate Transparency Act & Your Business

On January 1, 2021, Congress passed a set of provisions innocuously titled the Corporate Transparency Act (CTA) as part of the annual National Defense Authorization Act. This bill aims to help fight tax evasion, tax fraud, and other financial crimes by implementing a national database collecting registration information for all corporations and limited liability companies organized in the United States.

The reason why this is important is that when Congress said all, they truly meant all. As a result of the Corporate Transparency Act, all corporations, LLCs, and other entities registered with a state or Indian Tribe in the United States are subjected to these new reporting requirements. The Treasury Department has until the end of the year to promulgate the appropriate regulations, but all new or previously organized entities will have to comply with them.

The Corporate Transparency Act requires each beneficial owner to submit certain information to the Treasury Department upon registration of their business entity. A “beneficial owner” is an individual who exercises substantial control over the business entity, or owns or controls 25% or more of the ownership interest of the business.

Each beneficial owner will be required to submit the following information:

• A full legal name

• Their date of birth

• A current residential or business street address

• An identification document

The form of ID can be a passport, government ID, or driver’s license. Upon registration, this information will need to be submitted to the Treasury Department and must be kept updated if the entity remains in force.

It is never too early to begin preparing for the submission of this information. Bernick Lifson has been awaiting the Treasury Department’s final directions on how and when this information will need to be submitted. If you are looking for advice on how to handle these changes related to the Corporate Transparency Act and for assistance with other corporate transparency inquiries.

Ejectment Actions in Minnesota During the Ban on Evictions

Prior to the COVID-19 pandemic and related peacetime emergency in Minnesota, landlords had the right to evict renters from their properties under a wide variety of circumstances. That changed in 2020 when the "moratorium" or ban on evictions was put in place to help combat the fallout from the COVID-19 virus and related financial turmoil in the Minnesota community. With eviction actions now off the table, some property owners are looking into an older and lesser-known legal action to recover possession of real property that remains unaffected by the current eviction moratorium in Minnesota.

Since March 2020, Minnesota Governor Tim Walz has barred landlords from evicting renters from their real property with few exceptions. On July 14, 2020, he issued Emergency Executive Order 20-79, which modified the suspension of evictions and writs of recovery during the COVID-19 peacetime emergency in Minnesota. The Executive Order states, in relevant in part, that:

The ability of property owners, mortgage holders, or other persons entitled to recover residential premises from filing an eviction action on the grounds that a residential tenant remains in the property after a notice of termination of the lease, after a notice of nonrenewal of a lease, after a material violation of a lease, after the termination of the redemption period for a residential foreclosure, or after nonpayment of rent, is suspended.

Pursuant to this Executive Order, the ability of property owners or other persons entitled to recover residential premises from filing an "eviction action" against a "residential tenant" has been suspended by Governor Walz. This Executive Order remains the most current description of the state of the eviction moratorium in Minnesota since Governor Walz first declared the peacetime emergency in late March 2020.

Importantly, Governor Walz's recent restrictions on evictions during the peacetime emergency present no barrier to bringing ejectment actions, where appropriate. As such, it is more important than ever to understand the difference between these two very similar possessory legal actions.

Minnesota law provides that evictions are only appropriate in specific situations—usually to terminate a tenancy or when a person "holds over" or remains at a property after the property has been sold or foreclosed. See Minn. Stat. § 504B.285, subd. 1(a). Similarly, in suspending eviction actions in Minnesota, the Executive Order applies only to actions against "residential tenant[s]." For purposes of an eviction action, "'residential tenant' means a person who is occupying a dwelling in a residential building under a lease or contract, whether oral or written, that requires the payment of money or exchange of services . . .." Minn. Stat. § 504B.001, subd. 12.

Ejectment is a more general but less common, possessory action and may be maintained by any person entitled to exclusive possession of real property against a person currently in possession of the same. The Minnesota Supreme Court has squarely held that the legal owner of the property has the right to possess it unless a contract (such as a lease or other rental agreement) has deprived them of it. To maintain an action in ejectment, the property owner must establish that another party has possession of the property and is withholding possession from the property owner without justification.

Simply put, an ejectment action is much more general in scope than an eviction action and not appropriate where a contract (such as a lease agreement) is in place to give another party the right to possess the property. Thus, where a property owner seeks to recover possession of their real property from another party who is not an authorized tenant with a lease agreement, the Executive Order presents no barrier to the property owner bringing an ejectment action.

At Bernick Lifson's, we are well-versed in eviction actions, ejectment actions, and Governor Walz's recent restrictions on evictions and terminating tenancies in Minnesota. If you have questions about recovering possession of your real property during these unusual times, don't hesitate to get in touch with us to discuss your rights and the remedies that might be available to you.