Important Update: Corporate Transparency Act (CTA)

If you have an LLC, LP, corporation, or other legal entity for business or personal purposes, please read the below update as it relates to the Corporate Transparency Act (CTA).

If you missed our previous communication about the CTA, please [Click Here] to catch up before reading this update.

Earlier this year, a federal district court in Alabama ruled¹ that the CTA is unconstitutional but suspended enforcement of its provisions only for the plaintiffs in that case. The federal government has already begun the process of appealing the decision. However, other cases challenging the constitutionality of the CTA have been filed in different federal courts, and bills have been introduced in both the House and the Senate to delay or terminate the CTA. While these developments are promising for those hoping to avoid the new reporting requirements, expectations should be tempered by the fact that litigation is a slow process and the bills introduced in Congress have yet to gain traction.

Given the harsh penalties for noncompliance, it is prudent to assume that the CTA will remain in effect for now. Parties that need to file should start gathering the necessary information to avoid a last-minute rush. Entities that existed before January 1, 2024, have until the end of the year to file these reports (due by 12/31/24). Entities formed in 2024 that have initial reports due before the end of the year should file them with FinCEN by their due date.

Parties that need to file can work with their attorney to file on their behalf or can file using the below instructions on how to file.

Here are a couple of items that may be useful for your CTA compliance:

• An Excel spreadsheet for gathering and organizing the information needed to file CTA reports with FinCEN: 

• Step-by-step instructions on how to apply for a FinCEN Identifier: A FinCEN Identifier is a unique ID number assigned to you. It can be used by entities to report their Beneficial Owners instead of providing detailed owner information on the report. We recommend obtaining a FinCEN Identifier if you are responsible for multiple Beneficial Ownership Information (“BOI”) reports or if you need to provide your information to third parties preparing BOI reports for entities in which you hold a beneficial interest.

• You can file the Beneficial Ownership Information personally by going to https://www.fincen.gov/boi and following their step-by-step process to file electronically. You will want to have your FinCEN ID before beginning to file.