Corporate Transparency Act (CTA) Resources from CT Corporation

The Corporate Transparency Act is a federal law that requires small businesses to file a beneficial ownership information (BOI) report with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This report contains personal identifying information about a company’s beneficial owners as well as information about the company (and for reporting companies created or registered on or after January 1, 2024, information about the company applicants). The requirement went into effect on January 1, 2024.

The answer is found in the final reporting rule’s definition of reporting company, which is stated below. If the organization meets the definition it is required to file a report unless it qualifies for an exemption.

The final rule states that Beneficial Ownership Information reports have to be filed by domestic reporting companies and foreign reporting companies. A domestic reporting company is defined as an entity that is a corporation, LLC or other entity created by the filing of a document with a secretary of state or similar office under the laws of a state or Indian tribe. A foreign reporting company is an entity that is a corporation, LLC, or other entity created under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or similar office under the law of a state or Indian tribe.

Any domestic reporting company created on or after January 1, 2024, must file a report within 90 calendar days of either receiving actual notice that its creation has become effective or the Secretary of State or similar office first providing public notice it’s been created, such as through a publicly accessible registry, whichever occurs first.

Any entity that becomes a foreign reporting company on or after January 1, 2024, must file a report within 90 calendar days of either receiving actual notice that it has been registered to do business or the Secretary of State or similar office first providing public notice it’s been registered, such as through a publicly accessible registry, whichever occurs first.

A domestic reporting company created before January 1, 2024, and an entity that became a foreign reporting company before January 1, 2024, must file a report not later than January 1, 2025.

• Has a nationwide preliminary injunction been filed against enforcement of the CTA and if so what does that mean?

On December 3, 2024, a federal district court in Texas issued an order granting a nationwide preliminary injunction that: (1) prevents enforcement of the CTA and of FinCEN’s rules implementing the CTA’s BOI reporting requirements, and (2) temporarily suspends all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024. 

Reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

On December 3, 2024, a federal district court in Texas issued an order granting a nationwide preliminary injunction that: (1) prevents enforcement of the CTA and of FinCEN’s rules implementing the CTA’s BOI reporting requirements, and (2) temporarily suspends all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024. 

Reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.