News and Updates

New Deadline

Updates to the Beneficial Ownership Information Reporting

As of December 23, 2024, a Texas Federal Court's nationwide injunction halting enforcement of the Corporate Transparency Act's beneficial ownership reporting requirements has been lifted by the Fifth Circuit Court of Appeals, meaning businesses are now required to comply with the reporting mandates and file their beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN).

Recent regulatory changes have brought significant updates to the reporting obligations for companies filing beneficial ownership information. The beneficial ownership information (BOIR) reports is to be enforced and reporting requirements are now back in effect with deadline extensions.

The nationwide injunction issued earlier this month by a federal judge in Texas, concluded that the Corporate Transparency Act (CTA) was unconstitutional. The appeals court said The U.S. Department of Justice in defending the statute, made a strong showing that it is likely to succeed on the merits in defending CTA's constitutionality. Under the law, corporations and LLCs were required to report information concerning their beneficial owners to FinCEN, which collects and analyzes information about financial transactions to combat money laundering and other crimes.

The bureau of the U.S. Department of Treasury, Financial Crimes Enforcement Network (FinCEN) have once again notified businesses that the reporting requirement was back in effect. The extended deadlines to file reports, for companies created before 2024 now would have until January 13, 2025 to submit their beneficial ownership information.

For more information, visit fincen.gov/boi

Ready to file?

Click here for help

What Every Small Business Needs to Know About the Corporate Transparency Act

Understanding the Corporate Transparency Act

The Corporate Transparency Act (CTA), effective as of January 2024, requires many U.S. small businesses to report ownership details to the government. Businesses that qualify must file reports detailing beneficial ownership information report (BOIR). The original deadline for most eligible businesses to comply was January 1, 2025. Failure to meet this deadline—or to update information as required—could result in fines up to $10,000, civil penalties of $591 per day, and even imprisonment of up to two years.

Recent Developments

As of December 4, 2024, Texas Federal Court has halted the enforcement of the Corporate Transparency Act beneficial ownership information reporting requirements. This nationwide preliminary injunction will remain in effect until legal proceedings conclude, meaning businesses are not currently obligated to comply with the reporting mandates.

The Texas Federal Court granted this injunction, citing potential constitutional concerns with the CTA’s BOIR requirements. The court determined that the act may cause sufficient harm to warrant suspending its enforcement. Without this injunction or an applicable exemption, the CTA mandates all U.S.-registered legal entities to disclose information about their beneficial owners and individuals with significant control to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury.

This pause has brought relief to approximately 32.6 million businesses preparing to meet these new obligations. Many companies were still assessing their reporting requirements and collecting the necessary documentation when the injunction was issued. While the injunction temporarily suspends reporting requirements, the CTA's legal status remains unresolved. TW Business Service will continue to monitor this evolving situation and provide updates as new information becomes available.