Recap: The Pause on CTA Reporting

As of December 3, 2024, the enforcement of the Corporate Transparency Act (CTA) was temporarily halted by a nationwide preliminary injunction issued by the U.S. District Court for the Eastern District of Texas. This injunction suspended the requirement for Reporting Companies to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN) before the January 1, 2025 deadline.

However, this suspension was short-lived. On December 23, 2024, the 5th U.S. Circuit Court of Appeals granted a stay of the injunction, allowing the CTA’s enforcement to resume. As a result, businesses are once again required to comply with the CTA’s reporting requirements.

Current Status: Reporting Reinstated and Deadlines Briefly Extended

In light of the time lost during the injunction period: Companies created or registered prior to January 1, 2024 now have until January 13, 2025, to file their initial BOIR (originally due by January 1, 2025)

Failure to submit the required information can result in significant penalties.

What Does This Mean for You?

Filings Are Back on Track: The CTA’s reporting requirements are now in full effect. If your company has not yet filed its BOI report, you are required to do so by the new applicable deadline.

Deadline Extensions Provide Extra Time: The extended deadlines provide additional time to submit reports, but it’s important to act quickly to avoid last-minute complications.

Comply Now to Avoid Penalties: Companies that fail to file their reports could face civil fines of up to $591 per day.

FAQs:

• Do I still need to file now? Yes, if your entity is required to file the BOIR form, the CTA reporting requirements have been reinstated, and you are required to file your BOIR according to the applicable deadline.
• What if I missed the previous deadline? If your business was created or registered before January 1, 2024, you now have until January 13, 2025 to file.
• Can I still file now to avoid last-minute stress? Yes, filing ahead of the deadline is recommended to ensure timely compliance and avoid complications should further legal developments cause any last-minute changes.
• What happens if I don’t file? Non-compliance with the CTA can result in significant penalties, including daily fines and criminal penalties of up to $10,000.

Our Recommendation

• With the CTA’s reporting requirements now back in effect, it’s essential to ensure that your business complies before the extended deadlines. Preparing your BOI report now can help you avoid the rush and ensure you meet the new filing deadlines.

If you have any questions or need assistance in preparing for CTA compliance, please don’t hesitate to contact us.

Get in touch:

• Call Us: (949) 756-0684
• Email Us: Brooke M. Pollard: [email protected]; Lauren M. Doyle: [email protected]

As the CTA enforcement resumes, businesses must act swiftly to ensure compliance and avoid penalties.