In a series of recent legal updates, businesses across the United States face shifting deadlines to comply with the Corporate Transparency Act (CTA). Passed in 2021, the CTA seeks to combat financial crimes such as money laundering, tax fraud, and terrorism funding by requiring most businesses to disclose ownership details to the Financial Crimes Enforcement Network (FinCEN).
Initially, a Texas District Court issued a nationwide injunction on December 3, 2024, halting the enforcement of Beneficial Ownership Information Reporting (BOIR) requirements. During this time, businesses could submit BOIRs voluntarily, but it wasn’t mandatory. On December 23, the Fifth Circuit Court of Appeals reversed the injunction, reinstating the CTA requirements and extending the original January 1, 2025, deadline to January 13, 2025, for most reporting companies. The updated deadlines also gave specific extensions to businesses impacted by the injunction period. Days later, on December 26, the Fifth Circuit reversed its decision again, reinstituting the injunction and making compliance with BOIR voluntary for the time being.
Businesses created before January 1, 2024, must file by January 13, 2025. Those formed between September 4 and December 23, 2024, now share the same January 13, 2025, deadline, with companies formed specifically between December 3 and December 23 granted an extra 21 days to file. Companies created on or after January 1, 2025, have a 30-day window to submit their filings. For businesses qualifying for disaster relief, deadlines may extend beyond December 13, 2025.
The CTA’s reporting requirements are designed to enhance financial transparency by requiring businesses to disclose key information, such as names, addresses, and identification numbers for owners and controlling individuals. While many large companies and nonprofits are exempt, the law primarily impacts small businesses like LLCs and corporations with fewer than 20 employees and less than $5 million in annual revenue. Non-compliance carries significant penalties, including fines of up to $500 per day and potential criminal charges. FinCEN and the Treasury Department emphasize the importance of compliance. Business owners are encouraged to stay updated on legal developments and file their BOIRs as early as possible to avoid penalties. The centralized registry created under the CTA is expected to promote fairness by addressing financial misconduct tied to anonymous ownership structures.
For questions or updates regarding the requirements, schedule your consultation with a lawyer at Williams, McClernan, & Stack LLC.
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