The Corporate Transparency Act is back on
The NLBMDA reports that the 5th Circuit Court of Appeals has issued an order lifting the temporary injunction of the Corporate Transparency Act (CTA). This order overturns the Dec. 3 decision by U.S. District Judge Mazzant who ruled that the CTA was "beyond the scope of Congress’ authority under the U.S. Constitution's Commerce Clause to regulate economic activity."
Now, nearly 33 million small businesses will have to register with the Financial Crimes Enforcement Network (FinCEN) by January 13 or face fines of up to $10,000, per CBS News. According to the U.S. Chamber of Commerce, businesses must submit:
- Your company's full legal name.
- Its business address (P.O. boxes or lawyers' offices aren't accepted, the Chamber of Commerce says).
- The state where the company was formed or first registered.
- A taxpayer identification number and an identity document, such as a filed Articles of Incorporation.
- Beneficial owners' full legal names and birth dates.
- Beneficial owners' home addresses.
- A photocopy of beneficial owners' U.S. driver's license or passport.
The National Federation of Independent Business (NFIB), appellees in the case, issued a statement expressing disappointment with the ruling and have vowed to appeal. “Make no mistake, NFIB is already working to quickly appeal this terrible decision and provide our Main Streets with a reprieve from this harmful mandate,” said Beth Milito, executive director at NFIB.
Meanwhile, a FinCEN spokesperson told CBS News:
"The Corporate Transparency Act levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage."
The NLBMDA, which has been vehemently advocating for a delay in the CTA’s enforcement, shared a statement from president Johnathan Paine: “The 5th Circuit ruling is a disappointing setback for our industry and the small business community. NLBMDA will continue to advocate for a full repeal of the law and will remain steadfast in its support of the several ongoing legal efforts challenging the CTA.”
After the latest ruling, FinCEN released a statement acknowledging the injunction reversal and issued new guidance to reporting companies. “In light of a December 23, 2024, federal Court of Appeals decision, reporting companies are once again required to file beneficial ownership information with FinCEN.” The statement continues: “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, we have extended the reporting deadline.” Businesses now have until January 13, 2025, to submit their initial beneficial ownership information (BOI) reports with FinCEN. Complete information can be found on FinCEN’s website.
