Under the Corporate Transparency Act, which was enacted by Congress and took effect on January 1, 2024, most small business owners in the United States will be required to report information regarding their “beneficial owners” to the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). This law was created with the intent to combat money laundering and/or tax fraud schemes that use layers of LLCs to hide money. The law allows FinCEN to collect information to compile a database of those LLCs, including information regarding the state of organization and information about the individuals who control each company.
If you are a business owner, you may have heard that earlier this month (on December 3, 2024) a federal district court in Texas granted an order enjoining enforcement of the reporting requirements, effectively stalling the need to submit information. On December 23, 2024, a motions panel of the Fifth Circuit Court of Appeals granted an emergency motion for a stay pending appeal that was requested by the government. This emergency stay allowed the federal government to once again require the reporting of beneficial ownership information, and FinCEN announced a January 13, 2025, deadline for that information.
However, the Fifth Circuit Court of Appeals reversed course on December 26, 2024, and once again put in place an order enjoining enforcement. So once again, the requirements to report beneficial ownership information are on hold.
What does this mean for you as a small business owner?
While there are no current requirements for you to report your beneficial ownership information to FinCEN, but you still have the ability to voluntarily complete the reporting if you so choose. One estimate states that there are still 28 million businesses across the country that have not filed BOI reports, and if the above timeline is any indication, there will only be mere weeks between the reporting requirements being put in place again and the new deadline for filing. At the very least, it may be advisable to compile the necessary information so that it is ready to file as quickly as possible if and when the reporting requirements are reinstated.
If you need assistance with the reporting requirements for your business, please do not hesitate to contact our firm – we would be happy to assist you in determining who the beneficial owners of your company are and to help you complete the necessary filings.
