On January 1, 2024, the federal government began requiring virtually all LLCs, Corporations, and Business Entities to begin reporting all beneficiary owners of each entity to a federal agency called FinCEN (the Financial Crimes Enforcement Network). The general deadline for entities was December 31, 2024.
Individuals or businesses that fail to report the required information or provide false or fraudulent information may be subject to a civil penalty of $600 per day (per entity) that the violation continues. In addition, for willful or fraudulent violations, imprisonment for up to two years is possible as well as criminal financial penalties.
On December 3, 2024, the United States District Court for the Eastern District of Texas entered a nationwide preliminary injunction blocking the enforcement of the Corporate Transparency Act (CTA) and its implementing regulations. On December 23, 2024, the Fifth Circuit Court of Appeals issued a stay of the preliminary injunction and reinstated the requirement for all entities to complete this reporting to FinCen.
In light of the Fifth Circuit’s ruling, the Financial Crimes Enforcement Network issued an alert that reporting companies are once again required to file beneficial ownership information reports, but the deadline has been extended. Reporting companies that existed before January 1, 2024 now have until January 13, 2025 to file their reports.
While all of this is confusing, the bottom line is that if you have already filed your CTA/BOIR report for each LLC and Corporation, you do not need to take any further action. If you have not completed this filing for each entity, the deadline is likely January 13, 2025, though further analysis may be required depending on the circumstances.
If you need to retain Evans & Davis to assist you with these filings, please contact us at attorneys@evansdavis.com