Corporate Transparency Act 

CTA Update, December 23, 2024

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, FinCEN has extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
• Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
• Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
• As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

For more information, visit the Financial Crimes Enforcement Network website.

CTA Update, December 9, 2024

The U.S. Department of Treasury issued an alert recently stating that companies are no longer required to file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN). This comes just days after the Texas federal court ruling and nationwide injunction on the CTA and just weeks before the January 1st filing deadline. The treasury announced that reporting is now voluntary while litigation continues.

CTA Update, December 3, 2024

On Tuesday, December 3, a federal judge in Texas sided with the National Federation of Independent Business, several small businesses and non profits concluding that the Corporate Transparency Act (CTA) is likely unconstitutional.

U.S. District Judge Amos Mazzant in Sherman, Texas, has issued a nationwide injunction therefore blocking the enforcement of the CTA ahead of its January 1, 2025 deadline.

To read more about this block, head to https://news.bloomberglaw.com/daily-labor-report/corporate-transparency-act-blocked-nationwide-by-texas-court.

The Corporate Transparency Act – What You Should Know

For a complete breakdown on the Corporate Transparency Act, you can read a detailed explanation by the American Bar Association, an association for attorneys.

In 2021, Congress passed the Anti-Money Laundering/Corporate Transparency Act. Included as part of this legislation is required reporting called Business Ownership Information (BOI). The act was intended to detect and report suspicious corporate financial activities related to money laundering and terrorism activities.

Consequently, community associations are caught up in these new reporting requirements.

These reporting requirements place a significant administrative burden on associations and their managers, who are acting as agents.

While industry associations are advocating for the Department of Treasury to exempt community associations from these new reporting requirements, it is unclear whether their efforts will be successful. On September 10, the Community Associations Institute (CAI) filed a lawsuit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network asking federal courts to recognize that community associations should be exempt from the Corporate Transparency Act’s reporting requirements.

While the lawsuit is in process, it does not affect the Act from being a requirement on January 1, 2025.

CACM is also working with congressional leaders in an attempt to exempt community associations.
See Congressional Letter below:
Congress members request delay of implementation of CTA (deadline extended to Jan. 1, 2025).

For now, all incorporated associations should plan to file a BOI report by the deadline. Associations will need to file electronically through the Financial Crimes Enforcement Network website. The information that must be submitted includes association name, board member information (legal name, birthdate, home address, driver’s license, state ID or passport number), identity information for any other individual with substantial financial control.

The new requirements are effective as of January 1, 2024.  The deadline for existing corporations to file is January 1, 2025.  Failure to file could result in civil and criminal penalties and fines.