Key Update: Deadline Extended to January 13, 2025
The South Texas Business Lawyers (STBL) want to ensure our clients and community are up to date on critical changes to the Corporate Transparency Act (CTA) filing requirements. Recently, the deadline for most reporting companies to file Beneficial Owner Information (BOI) with the Financial Crimes Enforcement Network (FinCEN) was extended from December 31, 2024, to January 13, 2025. This extension offers a short reprieve for businesses still working to comply, but the urgency remains high. STBL can help you meet the timelines under the CTA.
Understanding the CTA
The CTA aims to enhance transparency and combat financial crimes by requiring certain business entities—classified as "reporting companies"—to report information about their Beneficial Owners (BOs).
Who Needs to File?
Reporting Companies - The CTA applies broadly to closely held business entities, including:
- Limited Partnerships (LPs)
- Limited Liability Companies (LLCs)
- S Corporations and other corporations
Certain inactive or terminated entities may also be subject to these requirements unless exempt.
Beneficial Owners – A Beneficial Owner is defined as anyone who:
- Owns 25% or more of the reporting company
- Exercises “substantial control” over the company
The “substantial control” standard is broad, potentially encompassing officers, directors, managers, and other key employees. Filing becomes even more complex when trusts are
involved, often requiring fiduciaries and other stakeholders to provide their information.
Should You File Now?
Many have hoped ongoing legal challenges to the CTA might render compliance unnecessary. While some courts have granted temporary relief, the overall trend favors upholding the CTA. Penalties for willful non-compliance may include fines of up to $600/day and potential jail time of up to two years.
Given this legal and regulatory landscape, we strongly advise all businesses to comply as required. Failing to file carries significant risks, and the short extension does little to mitigate the need for prompt action.
Recent Legal Developments and FinCEN’s Stance
Court Rulings
On December 23, 2024, the Fifth Circuit stayed a preliminary injunction that had temporarily paused CTA requirements. As a result, FinCEN has reinstated filing obligations and adjusted deadlines to accommodate businesses affected by the injunction.
Updated Deadlines
- Created/Registered Before January 1, 2024: File by January 13, 2025
- Created/Registered Between September 4, 2024, and December 23, 2024: Deadlines vary but generally extended by 21 days.
- Created/Registered On or After January 1, 2025: File within 30 days of registration.
- Disaster Relief: Extended deadlines may apply for certain entities.
Next Steps for Businesses
- Evaluate Your Filing Requirements
Determine if your business qualifies as a reporting company and identify all Beneficial Owners.
- Gather Necessary Information
Prepare the BOI required for submission, including names, addresses, and identification details for Beneficial Owners.
- Act Promptly
The extended deadline is fast approaching. Begin your filing process now to avoid penalties.
- Seek Professional Guidance
Given the complexities of CTA compliance, consulting with experienced legal and financial advisors is essential. STBL is ready to ensure you meet the deadlines of the CTA.
Conclusion
FinCEN’s recent actions make one thing clear: compliance with the CTA is non-negotiable for most businesses. The South Texas Business Lawyers are here to help you navigate this challenging process. If you have questions about your obligations under the CTA or need assistance with your filing, contact us today.
Don’t wait—time is running out. Let us help ensure your compliance and protect your business from costly penalties. Visit https://stbl.pro/stbl-boi-services for more information if you need assistance with filing your BOI Report.
For further updates on this and other regulatory changes affecting businesses in Texas, follow The South Texas Business Lawyers.
Disclaimer: This article is made available for educational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice. By using this article, you understand and acknowledge that no attorney-client relationship is formed between you and The South Texas Business Lawyers, nor should any such relationship be implied. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.