12/30/24 Corporate Transparency Act Update
What's Current (As of 12/26/2024)
A new ruling on December 26 by a different panel of the Fifth Circuit Court of Appeals reversed the same court's previous ruling (from December 23) and reinstated the national injunction against the enforcement of the Corporate Transparency Act. At the time of publication (2:00 pm, 12/30/2024), neither the original nor extended filing deadlines announced on December 23 are in effect.
Further, an announcement from the Financial Crimes Enforcement Network (FinCEN) says, "Companies are not currently required to file a BOIR and are not subject to liability if they fail to do so while the applicable order remains in force."
Yes, this is messy, but being up-to-date on this compliance issue is important for your business. Under the original rule, failure to comply with the reporting requirements meant that businesses could be fined up to $591 per day for each person at the company who should have filed an accurate report. Penalties could also increase if the failure to report is linked to other criminal activities or the violation is ongoing.
Original Overview Overview of Beneficial Ownership Information Reporting Requirements Under the CTA
Here's the original information that we distributed about the CTA:
Beginning January 1, 2024, the federal Corporate Transparency Act (CTA) requires certain types of entities to file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of Treasury.
Each “reporting company” must file a BOI report with FinCEN. As the CTA defines, a “reporting company” as a corporation, limited liability company, or other similar entity created or registered to do business in the U.S. by filing a document with a secretary of state (or comparable office).
The CTA contains other important definitions; lists certain exemptions; specifies reportable information; and imposes both civil and criminal penalties for violations of the reporting requirements. The beneficial ownership information required by the CTA should only be submitted directly to FinCEN through its online Beneficial Ownership Secure System (BOSS).
To protect your privacy and avoid delays in processing documents submitted to this office, you should not include beneficial ownership information when forming or registering an entity to transact business in this state.
For additional information, please review the FinCEN resources listed below.
If you need further assistance understanding the CTA reporting requirements, you may wish to consult with a private attorney.
This overview and the resources provided are for general informational purposes only and are not intended as legal advice or as a substitute for the advice of an attorney.
FinCEN continues to be the best resource for up-to-date information about complying with the Corporate Transparency Act and its reporting requirements.