Legal Perspective on Business and Entertainment
*BUSINESS ALERT*
The Corporate Transparency Act – Effective January 1, 2024
The Corporate Transparency Act (CTA) is a relatively new law that requires businesses to report their beneficial owners to the U.S. government. The purpose of the CTA is to prevent money laundering, tax evasion, and other criminal activities by increasing the transparency of business ownership. While there are some exemptions, beginning in 2024, many small businesses will need to regularly report information regarding ownership of the business. As is often the case, the implementing regulations may be adjusted along the way, but here is an overview to give you a sense of the requirements.
MIND YOUR BUSINESS
Keeping Your Business in Order
MINUTES MATTER
Whenever your Board, your Shareholders, your Managers, or your Members meet to discuss the business of your company, someone should (read “must”) be designated to take the Minutes of that meeting. We’re not talking about cocktail parties, company outings, or business lunches here, but we are talking about meetings that involve the company taking action on a particular issue or matter, or a discussion on long-term planning, or the admission of a new shareholder or member, or simply the act of appointing officers or managers to run the company.
What are Minutes. Minutes (or Minutes of Meeting) are a written report of what took place at a Meeting. At a minimum, they include the name of the body that is meeting (e.g., The Board of Directors of ABC Company, Inc.), the date and place of the meeting, who was present (and absent) at the meeting, and what was decided at the meeting. Minutes are a record of the action taken by company leadership.
Why Minutes Matter. Minutes are just as important as any other entity document and they are considered legal documents by auditors, the IRS, and the courts. As the adage goes, if an action isn’t in the minutes, it didn’t happen. Minutes are the ongoing record and reference regarding the operation of the entity, and they should (must, really) be done with regularity, attention to detail, and with a view toward brevity.
How to Take Minutes. Or, To Include or Not To Include – That is always the question. There are a great many ways to take Minutes, but the overarching best practice is to avoid the unnecessary and include the essential in giving an account of the topics discussed and any action taken. Do not include personal observations, commentary, or opinions. Be sure to include facts (date/time/place of meeting, attendance, topics discussed, and decisions made). Minutes should be concise and summarize the major points of what happened at the meeting. When taking Minutes it is helpful to do so with a future reader in mind – you will need to convey to that future reader a concise account of the past.
MUSIC NEWS
BMI GOES PRIVATE
BMI (Broadcast Music Inc.) a performing rights organization that represents songwriters and music publishers and collects royalties on their behalf from radio, streaming, broadcast, and related uses, has announced that it will sell to the private equity firm New Mountain Capital. The deal is expected to close Q1 2024. The sale comes after BMI changed its model from a non-profit to a for-profit entity. While this transition has brought criticism from some songwriter groups who fear losing control and transparency over their rights, BMI said the move will accelerate its growth plan and deliver more value to its affiliates (songwriters and music publishers) while maintaining its mission and core values. This will be one to watch.
FILM & TELEVISION
Featured Agreement
SHOPPING AGREEMENTS
A Shopping Agreement is an agreement between the owner of a creative work such as a screenplay, treatment, book, series bible, etc. (the “Property”), and a producer, whereby the producer obtains the right from the owner to “shop” the Property to buyers (e.g., financier, studio, distributor, networks, or other potential buyers) for a fixed period of time.
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