UPDATE: This law was bound for controversy from inception. Days after one court of appeals panel reversed an injunction, another court of appeals panel reinstated the injunction. It is safe to say this remains a fluid situation. Please stay tuned for further developments. Until then, the injunction staying reporting is back in effect.
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We previously reported on the nationwide injunction that stayed the reporting requirement for the Corporate Transparency Act (CTA). We also advised that this development was likely to evolve quickly. As predicted, earlier this week the U.S. Court of Appeals for the Fifth Circuit reinstated the reporting requirement for the CTA.
The original deadline to file your Beneficial Ownership Information (BOI) was set for December 31, 2024 but that has been extended to January 13, 2025. A lot can happen from now until January 13th as this is an ever-evolving situation, but for now, with the requirement reinstated, here are some FAQ’s to help guide you through the process.
Do I Need to Report?
All entities formed or registered to do business in the U.S., including single member LLCs and single shareholder corporations.
Are There Exceptions?
Yes, there are limited exceptions. Examples include: public companies, insurance companies, banks, registered investment companies, registered investment advisers, and businesses regulated by either a state or federal agency.
What Do I Need to Report?
You must disclose certain information about the company e.g., name, address, taxpayer identification number, and identify all “beneficial owners” and “applicants”.
You are considered a “beneficial owner” if you directly or indirectly exercise substantial control over the entity, or you own/control more than 25% of the ownership interests.
What if I Don’t Report?
Penalties: The Act provides both civil penalties (up to $500/day for non-compliance which is adjusted annually for inflation) and criminal penalties (up to $10,000 and 2 years imprisonment) for willfully providing false information, failing to provide complete information, or failing to update information.
Who Gets Penalized: Both individuals and corporate entitles can be held liable for willful violations. This can include the individual who actually files the false information and the person providing the filer with false information.
How Do I Report? Visit https://boiefiling.fincen.gov/ to complete your report.
This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
Mona Naser | Practice Areas: Commercial & Residential Real Estate, Business Transactions, Litigation, and Workouts
Mona is a highly experienced legal professional specializing in providing counsel and representation to both corporate clients and individuals across various practice areas. Her knowledge base spans commercial litigation, real estate (both commercial and residential), and general corporate law, positioning her as a trusted advisor and advocate for her clients. If you need assistance with a related matter, contact Mona.
