UPDATE 12/26/2024:
WHIPLASH: The Corporate Transparency Act is back off (again).
A Fifth Circuit panel has reinstated a nationwide injunction blocking the Corporate Transparency Act, just three days after another panel lifted it. This back-and-forth has left compliance offices confused and businesses unsure about continuing voluntary disclosures.
With the injunction is back, businesses don’t have to submit beneficial ownership reports to the Treasury’s Financial Crimes Enforcement Network.
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Previous post from 12/24/2024
The Corporate Transparency Act (CTA) is back in effect.
The Fifth Circuit Court of Appeals has overturned a previous injunction, making the CTA immediately enforceable again. This means over 32 million U.S. businesses must resume submitting beneficial ownership reports. On the bright side, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has extended the compliance deadlines, offering some flexibility based on when your business was created.
If you’re a small business owner, the revived enforcement of the CTA directly impacts you. Read below to learn more about:
- What is the Corporate Transparency Act?
- What happened in the courts?
- The extended deadlines.
- ABC members to help you comply.
What is the Corporate Transparency Act?
We recently posted about the CTA, which requires businesses to report their beneficial owners to FinCEN, a bureau of the U.S. Department of Treasury. This means construction companies, like other businesses, must disclose their ownership details and identify anyone with significant control over the company.
What happened in the courts?
On December 23, the United States Court of Appeals for the Fifth Circuit overturned a federal court injunction that had temporarily halted the rollout of the CTA. The injunction was issued after small businesses and the National Federation of Independent Businesses filed legal complaints in May 2024, arguing that the CTA created unfair burdens.
The Fifth Circuit disagreed, stating that businesses had already had nearly four years since the CTA was enacted to prepare for its requirements.
With the reversal, the CTA is now fully in effect. Despite the brief pause in December, businesses are required to comply with the regulations established by the Treasury Department and FinCEN.
The extended deadline.
The CTA compliance deadline, originally set for January 1, 2025, has been adjusted by FinCEN to make the transition smoother due to recent legal developments.
For companies registered before January 1, 2024: The new filing deadline is January 13, 2025.
ABC members to help with compliance.
If you’re unsure if you’d be a reporting company, it’s a good idea to consult legal counsel to understand your responsibilities. Here are ABC Western Michigan members providing CTA compliance assistance:
This federal website also has several quick references and step-by-step instructions.
Questions? Don’t hesitate to reach out, info@abcwmc.org.
Disclaimer: This document is intended for informational purposes only and should not be considered as legal advice. Construction companies and other businesses should consult with a qualified attorney to evaluate their specific circumstances and ensure compliance with the Corporate Transparency Act and other applicable laws.
