CTA, BOI Reporting Notice to Small Business Members.

​As businesses navigate an ever-evolving regulatory landscape, it's crucial to stay informed about upcoming changes that could impact daily operations and compliance requirements. One such development is the Corporate Transparency Act, a law designed to promote transparency and curb illicit financial activities in the U.S. Beginning in 2024. Below, we provide key information about this important regulation and encourage you to take proactive steps to ensure compliance before the deadlines.

*UPDATED 12/11/24*
The U.S. District Court for the Eastern District of Texas, in a case styled Texas Top Cop Shop, Inc. v. Garland, issued a preliminary injunction against the enforcement of the CTA. Unlike the injunction issued in the National Small Business United decision, which injunction benefited only the members of that trade association, the injunction issued this week applies nationwide in favor of every company obligated to file beneficial ownership information reports with the Financial Crimes Enforcement Network.

In 2021, the U.S. Congress enacted the bipartisan Corporate Transparency Act (CTA) to curb illicit finance as part of a broader anti-money laundering effort by the federal government. Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. FinCEN began accepting reports on January 1, 2024.​

However, this week, the U.S. District Court for the Eastern District of Texas, in a case styled Texas Top Cop Shop, Inc. v. Garland, issued a preliminary injunction against the enforcement of the CTA. Unlike the injunction issued in the National Small Business United decision, which injunction benefited only the members of that trade association, the injunction issued this week applies nationwide in favor of every company obligated to file beneficial ownership information reports with the Financial Crimes Enforcement Network. Still, questions remain about whether an appellate court will take up the issue before the current reporting deadline of January 1, 2025, and whether other courts might disagree. 

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

A few details to consider when filing include:

• If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025, to report BOI.
• If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
• If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
• Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
• The definition of a “reporting company” is defined by FinCEN in their FAQs. Most small business entities will be subject to this reporting requirement.

FinCEN has a Small Business Resources page on their website with a Small Entity Compliance Guide and Frequently Asked Questions for businesses. Commerce Lexington recommends you consult your business’ legal counsel regarding further guidance if your company or business is subject to BOI reporting.


Commerce Lexington recommends you consult your business’ legal counsel regarding further guidance if your company or business is subject to BOI reporting.