UPDATE: The Fifth Circuit Court of Appeals has granted the U.S. government’s request to lift the temporary nationwide injunction that stopped the Corporate Transparency Act (“CTA”) from taking effect. That means that the deadline to report has been reinstated, but it is now January 13, 2025, instead of January 1. You can find additional information on the Financial Crimes Enforcement Network’s website at https://fincen.gov/boi.

If you’ve followed any of our resources, you’re hopefully aware of the Corporate Transparency Act (or CTA). This act, which became law in January of this year, requires many U.S. small business owners to file corporate transparency reports with beneficial ownership information. If you have a business entity like a corporation or an LLC, you would likely need to provide personal identifiable information (such as names, birthdates, home addresses, and ID numbers) to the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). You would need to turn over this information for any individual who exercises substantial control over the company OR who owns or controls at least 25% of the company. 

The CTA was passed to try and combat bad actors from hiding or benefitting from their ownership of U.S. entities for the purpose of doing something illegal and/or harmful to national security. For any companies formed before the CTA became law on January 1, 2024, the mandatory reporting date was set to be January 1, 2025. However, there may be a pause on that. 

A recent decision from a U.S. District Court in Texas put a nationwide stay (or temporary pause) on the bill going into effect while legal proceedings surrounding the CTA play out. Some entities have claimed that the law is unconstitutional, and while the District Court did not rule specifically on that aspect yet, it did put on hold the reporting requirement while the case works through the court.  

So, what does that mean for you? If you have not yet completed your reporting obligations, it means the January 1st deadline is (for the moment) no longer applicable. If you have already sent in the required information, this decision should not affect you at all. The U.S. government is appealing the temporary hold, so if something changes, we’ll be sure to let you know. If you have any more specific questions about the CTA or any other PM-related issue, please let us know on the Legal Hotline.