December 18th, 2024
Corporate Transparency Act Filing Requirements Halted
Posted in: Business Law Tagged: Karen N. Shapiro
A federal court has issued a nationwide preliminary injunction blocking the enforcement of The Corporate Transparency Act (CTA), which required businesses to report beneficial ownership information to the Treasury Department. This ruling affects an estimated 32.6 million businesses in the U.S., particularly smaller entities, by temporarily halting reporting obligations.
Businesses are relieved from the CTA’s reporting requirements for now, but this pause introduces uncertainty as the decision may be appealed, and the requirements could be reinstated.
What Businesses Should Do Next:
- Stay Informed: Businesses should closely monitor the legal status of the case, as the decision may be overturned, which may require reporting obligations in the future.
- Prepare for Compliance: While reporting is not required at this time, companies may consider assessing their readiness to comply with the CTA.
- Consult Advisors: Contact Stein Sperling if you have questions about the potential implications of the ruling.
The CTA requires certain entities to disclose information about the entity and its beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. For reporting companies created before January 1, 2024, the deadline for filing was set for January 1, 2025. However, the preliminary injunction has halted reporting obligations at this time.
