Since the Fifth Circuit Court of Appeals decision issuing a stay of the preliminary injunction of the Corporate Transparency Act, the Financial Crimes Enforcement Network has extended the deadline to the BOI Reports until January 13, 2025. This is an update to our last client alert.
Businesses can file their Beneficial Ownership Information (BOI) filings using the BOI E-Filing System, and follow the link for more information and updates of the FinCEN homepage.
About the CTA
The majority of businesses will be required to file BOI reports. Under the law there are exemptions to this rule: 23 types of entities are exempt from BOI reporting requirements and the list of exempt entities can be found here. These include banks, brokers, insurance companies, many nonprofits, and large operating companies, among others.
Importantly, there is no express exemption for cooperative corporations and condominium associations which are required to file BOI reports unless they fall within an exemption such as (a) being a tax exempt entity under Section 501 of the Internal Revenue Code; (b) not created by virtue of filing a document with the Secretary of State of similar office or (c) qualify as a “large operating company” that (i) employs more than 20 full time employees in the US; (ii) has income greater than $5,000,000.00; and (iii) has an office in the United States
Penalties
You may be subject to significant civil penalties for failing to file a BOI report. As laid out in the CTA, those who violate the BOI reporting requirements may be subject to fines of up to $500 for each day the violation continues; however, that figure is subject to inflation, and as of this writing, the amount is closer to $595 per day.
Looking Forward
While the Texas Top Cop Shop, Inc., et al. v. Garland, et al. continues to move forward and the appeal is expedited. In issuing the decision, however, the Fifth Circuit stated “the government has made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality”
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.