News Alert: Corporate Transparency Act

A federal district court recently enjoined the enforcement of the Corporate Transparency Act (CTA), giving business owners at least temporary relief while the courts and possibly Congress sort out what happens next.

The CTA, which went into effect on January 1, 2024, requires all entities created through a filing with the secretary of state to register with a federal agency known as FinCEN (the Financial Crimes Enforcement Network). Entities formed after January 1, 2025 are required to file a Beneficial Ownership Information Report (BOIR) at the time they are created. Entities formed prior to January 1, 2024 are required to file a BOIR prior to January 1, 2025.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction which prevents FinCEN from enforcing the CTA and its filing requirements and deadlines. On December 9, 2024, FinCEN released a statement in response to the injunction.

What does this all mean for entities subject to the CTA?

• If you previously filed a BOIR with FinCEN for your entity or entities, there is nothing you need to do. The existing filing is valid, and you are in compliance with the CTA regardless of what happens in the court proceedings.
• If you have not yet made the required BOIR filing, you have two options:
  1. You can complete the BOIR now. It will be accepted by FinCen. You will then be in compliance with the CTA regardless of what happens in the court proceedings. This is appropriate if you prefer to be done with the process.
  2. You can delay making a BOIR filing until the court proceedings are resolved one way or the other. Note, however, that if you do not file now and the court order is lifted in the future, you may be required to file the BOIR on short notice so it would be advisable to have all the information ready just in case.
• As a matter of course, Rembolt Ludtke plans to continue to make the required filing for all new entities created by our office.
• We remain available to assist you in making the BOIR if you would like to proceed with filing for existing entities.

If you have questions, please feel free to contact our CTA compliance team at BOI@remboltlawfirm.com or contact your regular Rembolt Ludtke attorney. We will, of course, be closely monitoring the situation and provide updates as they are available.

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