With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. 

The Corporate Transparency Act (the "CTA") requires every reporting company (unless exempt) to file a beneficial ownership report (a "Report") with FinCEN – the Financial Crimes Enforcement Network of the U.S. Treasury. Here’s what you need to know:

Do I need to file a Report?

All corporations, LLCs or other legal entities formed by the filing of a document with a Secretary of State (or any entity formed outside the U.S. that is registered to do business in the U.S. by filing a document with a Secretary of State) need to file this Report. This includes single-member LLCs, C Corps, and S Corps. As of now, most small businesses are required to file the Report. 23 types of entities are specifically exempt from filing. Details on exempt entities can be found here: https://www.fincen.gov/boi-faqs#?C_2

What information do I need to provide?

• Company Information 

• Legal name

• Type of filing (In most cases, initial report)

• Tax identification type and number (e.g., your EIN)

• Jurisdiction of formation or registration

• Primary U.S. address

• Beneficial Owner Information

• Legal name

• Date of birth

• Residential address

• Business address (if applicable)

• Identifying document type (e.g., driver’s license, passport) along with an image

• Company Applicants

• Reporting companies created or registered to do business after January 1, 2024 need to provide information about their company applicants, i.e., the individual who directly files the document that creates the domestic reporting company or registers the foreign reporting company

What is the filing deadline?

• Reporting companies created or registered to do business in the United States before January 1, 2024 must file by March 21, 2025.

• Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

• Starting January 1, 2025, businesses created or registered will have 30 calendar days from notice of creation or registration to file. This deadline is shifted to March 21, 2025, for reporting companies created between January 1 and February 19, 2025.

What happens if I do not file?

A person who willfully violates beneficial ownership reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues, as well as criminal penalties of up to two years imprisonment and a fine of up to $10,000.

How can I file my Report?

Filing is free and can be completed online at https://boiefiling.fincen.gov

FinCEN has published a guide to help small businesses complete the filing themselves. This can be located here: https://www.fincen.gov/boi/small-entity-compliance-guide

Is this a one-time filing?

After a reporting company files its initial Report, the reporting company will need to amend that Report within 30 calendar days after any change in its beneficial owners or their reported information. As a result, every reporting company should review its constituent documents and adopt a compliance policy to ensure that the company is able to comply with this requirement.

If you would like assistance, please contact us at akshita@singallaw.com or schedule a consultation.