Beneficial Ownership Information – Cancelled? Not exactly – you may want to ignore what you have been hearing . . .

The Corporate Transparency Act (CTA) created an additional reporting requirement for the vast majority of small businesses operating in the United States. The filing is quite a pain in the buttinski, requiring not only identification of the beneficial owners of a company, but anybody who has substantial control over the company’s operations (senior officers, board members, etc.) and submission of copies of drivers licenses or other identification for those individuals. See:
https://www.fincen.gov/boi. The most relevant exception in the CTA for our industry was that the filing was not required for any business that has (i) more than 20 employees, (ii) more than $5 million in annual gross revenue, and (iii) a brick and mortar physical presence in United States.

Back in April we advised that the CTA had a good chance of being struck down as unconstitutional. So the question is, file or don’t file? The deadline to file for existing businesses was January 1, 2025. For businesses formed in 2024 you were supposed to file within 90 days, and for businesses formed in 2025 you had 30 days.

Well, last week the Eastern District of Texas granted a nationwide injunction to stop the federal government from enforcing the CTA. That means that no filing is required for the time being. You may have heard of that. What you probably didn’t hear is that the Department of Justice immediately filed a motion to prevent the injunction from going effective – until the case can be heard by an appeals court. So, if the District Court grants that motion, the deadlines for the CTA will proceed as originally planned – and filings will have to have been made. In other words, stay tuned because we may not have a decision we can rely on for another week or three . .