For those of you keeping track:
- In May, we advised that your companies may be obligated to report information regarding certain of their owners/managers/others with a certain percentage interest in the company/control to the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) under the Corporate Transparency Act (“CTA”).
- On December 12, 2024, we advised that a U.S. District Court had issued a nationwide preliminary injunction against enforcement of the reporting requirements of the CTA.
- On December 24, 2024, we advised you that, on December 23, 2024, a U.S. Court of Appeals granted a stay of the preliminary injunction, thereby allowing, among other things, the enforcement of the reporting requirements of the CTA while the case proceeds.
- Today we advise you that, on December 26, 2024, a different panel of the U.S. Court of Appeals issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction.
Pursuant to the FinCen website
In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
What you should do
- Continue to track reporting requirements at https://fincen.gov/boi
- Consider voluntarily submitting beneficial ownership information reports
- Compile your Beneficial Ownership Information and be prepared to act swiftly if the injunction is stayed or lifted
- Contact us if you have questions
Penalties
Failure to timely report can result in penalties including: (i) civil penalties of up to $500 for each day that the violation continues; (ii) criminal penalties including imprisonment for up to 2 years and/or a fine of up to $10,000; and (iii) senior officers of a company that fail to file may be held personally accountable for any failure.
Please Note:
- If your company is created in a state other than Florida, please check that state’s requirements to ensure compliance and avoid possible penalties.
- FinCEN has learned of fraudulent attempts to solicit information subject to reporting requirements under the CTA. Be on the lookout for fraudulent correspondence. If you receive correspondence: (i) verify the sender; and (ii) do not give personal information to anyone unless you trust the other party and the method by which you are delivering the information. FinCEN issued an Alert on December 18, 2024, to raise awareness of fraud schemes. Learn more about these schemes and where to report them https://fincen.gov/sites/default/files/2024-12/Alert-FinCEN-Scams-FINAL508.pdf.
This communication provides only limited and general information about the CTA, does not constitute legal advice, does not create an attorney-client relationship between Milgrim Law Group and you or your company, or create any duties on behalf of Milgrim Law Group to provide advice with respect to the CTA. Milgrim Law Group provides advice related to CTA compliance and other matters only to current clients – and only when we expressly agree to do so in writing. Milgrim Law Group is not responsible for updating you or your company about developments regarding the CTA, including with regard to ongoing litigation challenging the CTA.
