UPDATE: New Reporting Requirements Stayed

On Tuesday, December 3, 2024, the Federal District Court for the Eastern District of Texas issued a preliminary injunction in Texas Top Cop Shop, Inc. v. Garland, 4:24-CV-478, granting a nationwide stay of the BOI, the reporting rule, and the filing requirements under the CTA. 

     As a result, the CTA, enforcement of the Reporting Rule, and the compliance deadline are all stayed, and reporting companies need not comply with the CTA’s January 1, 2025 BOI reporting deadline pending further court order. As this order is subject to appeal, and thus can change at any time, it is important that you continue to monitor the situation closely and comply with any additional instructions from the Court, as well as FinCEN.

     If you have any questions or concerns regarding your reporting requirements, please contact our office, and we will be happy to assist you.

The following is our pre-update post:

As we head into the holiday season, the attorneys at Braum | Rudd want to make sure all business owners are aware of new requirements of the Final Rule under the Corporate Transparency Act (CTA).  This rule requires non-exempt companies to report their beneficial ownership information.  You may be required to report this information if your company does not fall under one of the exemptions discussed below.

I.          WHO MUST REPORT

            If your company was created by filing documentation with a Secretary of State’s office (like an LLC or a corporation), then you are likely required to report unless you meet one of 23 exemptions.  Most exemptions relate to certain heavily regulated industries, such as banks, financial institutions, non-profits, etc.  However, the most common exemption is when a company has (1) more than 20 employees, (2) more than $5 million in gross receipts or sales reported on its tax returns, and (3) an office in the United States.

II.        WHEN MUST YOU REPORT

            Entities that were created before 2024 are required to report prior to January 1, 2025.  Entities that were created in 2024 have 90 days from formation to report.  Entities created in 2025 will only have 30 days from formation to report.

III.       WHAT INFORMATION MUST BE REPORTED

            Entities that are required to report must report personal information about their beneficial owners and applicants.  Beneficial owners are individuals who either directly or indirectly own or control not less than 25% of the entity’s ownership interests, or exercise substantial control over the entity.  Applicants are the individuals who filed the document(s) that created or registered the entity.  If an entity was created before January 1, 2024, it is only required to report its beneficial owners.     

IV.       HOW TO REPORT

            To file your report, go to fincen.gov/boi and follow the instructions on the website.  To assist with filing a report, FinCEN has published a helpful guide that outlines the reporting requirements and processes, as well as FAQs.  If you have any additional questions on how to report, or relating to FinCEN reporting in general, please contact our office for assistance.