As of January 1, 2024, the Corporate Transparency Act (CTA) is in full effect, requiring most smaller corporations, limited liability companies (LLCs), and other business entities to file a Beneficial Ownership Information (BOI) report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA is designed to increase transparency, helping law enforcement combat illegal activities such as money laundering.

Here’s everything you need to know about the CTA, its potential impact, and your filing deadlines:

---

What is the Corporate Transparency Act (CTA)?

The CTA mandates that most businesses provide detailed information on their beneficial owners—the individuals who directly or indirectly own or control the company. This information is submitted to FinCEN, where it will be accessible to law enforcement agencies. This new regulation is a critical step in ensuring transparency in the business world.

About 32 million businesses are required to file the BOI report. Since the law’s enactment, around 500,000 reports have already been filed through FinCEN's online portal.

---

The Court Ruling: What Does it Mean for Your Business?

On March 1, 2024, a federal district court in Alabama ruled that the Corporate Transparency Act was unconstitutional in a case called National Small Business United v. Yellen. This ruling stayed the enforcement of the CTA against the two plaintiffs involved—the National Small Business Association (NSBA) and a small business owner. The court’s injunction, however, only affects the plaintiffs in this case.

So, if you are not a member of the NSBA, this ruling has no direct impact on your business, and FinCEN still expects all businesses to comply with the law.

However, the Justice Department filed an appeal against the decision on March 11, 2024. So, the trial court’s decision is far from final, and it’s likely that the case will continue to evolve.

---

Filing Deadlines for Businesses

If your company was formed before 2024, you have until January 1, 2025, to file your BOI report. This gives you time to see how the ongoing litigation plays out, but it’s best not to wait too long to get the ball rolling.

If your business was formed during 2024, you must file your BOI report within 90 days of incorporation. Don’t wait until the last minute! Stay on top of your filing to avoid potential penalties.

---

State-Specific BOI Laws: New York’s Approach

In addition to the federal CTA, New York has implemented its own BOI reporting law for LLCs. Businesses that are either formed in New York or registered to do business in the state must file their reports with the New York Department of State. The deadline for existing LLCs is January 1, 2025. Newly formed LLCs will file their BOI report at the time of registration.

Other states, like California, are considering implementing similar laws, so it’s essential to stay updated on the regulations in your state as well.

---

Takeaways and Next Steps

• If your company existed before 2024, you have until January 1, 2025 to file your BOI report.

• If your company was formed in 2024, you have 90 days from incorporation to submit the report.

• The ongoing legal battle surrounding the CTA could impact its enforcement, but FinCEN still expects businesses to comply.

• New York and other states are also implementing their own reporting requirements, so check your state’s regulations.

If you have any questions about your obligations under the CTA or need help filing your BOI report, reach out to us today. We're here to ensure you stay compliant with both federal and state requirements and avoid any potential penalties.

---

Stay proactive and compliant—don’t wait to file your BOI report!