WARNING: New Law Could Cost Your Business $10,000 in Fines!
The Corporate Transparency Act (CTA), enacted in 2021, aims to combat illicit financial activities by requiring small businesses to disclose their true owners to the Financial Crimes Enforcement Network (FinCEN). This initiative targets anonymous shell companies often used for money laundering and other unlawful purposes.
Recent Legal Developments
The CTA's enforcement has faced legal challenges, leading to temporary injunctions. Notably, a federal judge in Texas issued an injunction, questioning the law's constitutionality. However, on February 18, 2025, this injunction was lifted, reinstating the CTA's reporting requirements. The Supreme Court also played a role by pausing a previous decision that had blocked the law's enforcement.
New Reporting Deadline
With the legal hurdles cleared, FinCEN has set a new deadline of March 21, 2025, for most companies to submit their Beneficial Ownership Information (BOI) reports. This extension provides businesses additional time to comply with the reporting obligations. FinCEN has indicated it may consider further deadline modifications, especially for companies posing lower national security risks.
Who Needs to Report?
The CTA primarily affects small businesses, including corporations and limited liability companies (LLCs) with fewer than 20 employees. Sole proprietorships and partnerships that are not incorporated are generally exempt from this requirement. It's crucial for business owners to determine their specific obligations under the CTA to ensure compliance and avoid potential penalties.
How to File Your BOI Report
To submit your BOI report, visit FinCEN's official e-filing portal at https://boiefiling.fincen.gov. Be cautious of third-party services charging fees for this process; filing directly through FinCEN is free. For comprehensive information and guidance, refer to FinCEN's BOI reporting page at https://fincen.gov/boi.
Penalties for Non-Compliance
Failing to comply with the CTA's reporting requirements can result in severe consequences. Businesses that willfully violate the reporting obligations may face fines of up to $500 per day, accumulating to a maximum of $10,000. Additionally, individuals who knowingly provide false information or fail to report can face criminal penalties, including imprisonment for up to two years.
Stay Informed
The landscape surrounding the CTA is evolving, with potential legislative actions that could impact reporting requirements. Bills such as the "Protect Small Business from Excessive Paperwork Act" propose extending the reporting deadline, while others aim to repeal the CTA entirely. Staying informed about these developments is essential for compliance and strategic planning.
Get Peace of Mind – Schedule a Free Consultation
Navigating new regulations can be overwhelming, but you don’t have to do it alone. Contact The Law Office of Jeffrey Blair today to ensure you’re in full compliance and avoid costly penalties.
📞 Call: (973) 327-7735
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Note: This information is based on the latest available updates as of February 20, 2025. For the most current information, always refer to official sources or consult with a legal professional.
