1/27/25 Corporate Transparency Act Update
What's Current (As of 1/27/2025)
Summary: As of January 27, 2025, business ownership reporting requirements under the Corporate Transparency Act remain voluntary. Why? There is still a Business Ownership Information injunction in place. While the Supreme Court of the United States lifted an injunction in the Texas Top Cop Shop case last week, a second injunction, from the Samantha Smith case is keeping an injunction in place. Filing BOI reporting is voluntary until legal challenges are concluded.
The statement from FInCen says this:
“On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
If you've been trying to follow this, then you know that it's been messy, but up-to-date information on this compliance issue is important for your business, and your Chamber is working to ensure you stay informed. Under the original rule, failure to comply with the reporting requirements meant that a business 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 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” is 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.