CTA Compliance Obligations Continue Despite District Court Ruling
CTA Compliance Obligations Continue Despite District Court Ruling
The Beneficial Ownership Information (BOI) reporting obligations under the Corporate Transparency Act (CTA) continue despite a federal district court order entered on March 1, 2024, finding that the CTA is unconstitutional and unenforceable against the particular plaintiffs in that case[1] Additional challenges to the ruling and CTA are expected.
BOI rules are enforced by the Financial Crimes Enforcement Network (FinCEN) of The U.S. Department of the Treasury. On March 4, 2024, FinCEN issued a press release acknowledging compliance with the district court order for as long as it remains in effect and confirming that FinCEN is not currently enforcing the CTA against the named plaintiffs.
All others must continue to evaluate compliance with: (1) the 90-day reporting deadline imposed upon reporting companies that are created or qualified to do business by a secretary of state or similar office during 2024, or (2) the December 31, 2024, reporting deadline imposed upon reporting companies created or qualified to do business by a secretary of state or similar office prior to 2024.
Reporting companies that are subject to the 90-day rule have a short window of time to evaluate CTA compliance while constitutional and enforcement litigation continues. Reporting companies that are subject to the December 31, 2024, reporting requirement will need to evaluate whether they will proceed with filing obligations based upon the current state of the law, or take a wait-and-see approach based upon future litigation outcomes.
CCM will continue to monitor changes to the CTA and BOI reporting requirements. For more information visit the CCM CTA Resource Library.
[1]National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)
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