Breaking News: 5th Circuit Court Stays Injunction on Corporate Transparency Act

January 1, 2025 Filing Deadline Reinstated

In a pivotal development for businesses nationwide, the 5th Circuit Court of Appeals has stayed the Texas District Court’s preliminary injunction, which had temporarily paused the enforcement of the Corporate Transparency Act (CTA). This decision reinstates the January 1, 2025, filing deadline for companies to comply with the CTA’s Beneficial Ownership Information (BOI) reporting mandate.

What Does This Mean for Businesses?

The reinstatement of the filing deadline requires millions of businesses across the United States to act swiftly. Under the CTA, certain entities must disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This measure aims to combat illicit financial activities like money laundering and terrorist financing by promoting transparency in corporate ownership.

Key Details of the 5th Circuit’s Decision

• Stay of Injunction: The 5th Circuit’s decision removes the pause on CTA enforcement, reinstating the compliance obligations for businesses.
• Immediate Implications: With less than ten days until the deadline, businesses must prepare to file Beneficial Ownership Information (BOI) reports by January 1, 2025.

Who Needs to File?

The Corporate Transparency Act applies to most small and medium-sized businesses formed in the U.S. or registered to operate here. This includes:

• Entities Required to File: LLCs, corporations, and similar business structures.
• Exempt Entities: Large operating companies and heavily regulated businesses.

Companies should consult legal or compliance professionals to determine their filing obligations.

Consequences of Non-Compliance

Failure to file BOI reports can result in severe penalties, including:

• Civil Penalties: Fines up to $591 per day until compliance is achieved.
• Criminal Penalties: Potential imprisonment for willful non-compliance.

Steps to Ensure Compliance

1. Identify Beneficial Owners:
   Determine individuals with substantial control or significant ownership of the company.
2. Gather Required Information:
   Collect the following details for each beneficial owner:
   • Full name
   • Date of birth
   • Residential address
   • Unique identifying number (e.g., passport or driver’s license number)
3. Leverage Compliance Tools:
   Platforms like FileForms simplify the filing process, offering secure, accurate, and timely submissions directly to FinCEN.

Why This Matters

The reinstated deadline underscores the critical role of the Corporate Transparency Act in enhancing corporate transparency and combating financial crimes. Businesses must prioritize compliance to avoid penalties, reputational risks, and legal challenges.

Final Thoughts

The 5th Circuit’s decision is a victory for the objectives of the Corporate Transparency Act, reaffirming its importance in the fight against financial crimes. As the January 1, 2025 deadline approaches, businesses must act swiftly to meet their Beneficial Ownership Information (BOI) filing obligations.

FileForms is here to simplify your compliance journey. Our platform ensures accurate, fast, and secure BOI filings, helping you stay compliant with ease.

Take Action Today