Quarterly Business Updates
The Newby Law Office, LLC issues a quarterly update letter for Business Representation Clients. The letter serves as a reminder on some important topics effecting small businesses. Below are some important updates to review.
DISCLAIMER
*** NOTHING ON THIS PAGE SHOULD BE CONSIDERED LEGAL ADVICE***
LEGAL ADVICE NEEDS TO COME DIRECTLY FROM THE ATTORNEY.
SCHEDULE TIME TO MEET WITH AN ATTORNEY TO DISCUSS THESE MATTERS FURTHER.
Beneficial Ownership Information Reporting - 2025 Q1 Update
Sadly, the most important legal information to share is BOI again. Beneficial ownership information reporting requirements are now back in effect, with a new deadline of March 21, 2025, for most companies. Please let me know if you have filed this information or if you still need to report this information. Read the Q4 update for more information.
The FinCEN website states, “FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines.”
It also states, “No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.”
These paragraphs could mean that you might not need to file by the new reporting date of March 21, 2025. Given the current administration’s aversion to regulations, I would not be surprised if the deadline becomes postponed indefinitely. But for now, I think it is best to file unless your company has a complication that would make filing difficult. Again, please let me know if you have filed this information or if you still need to report this information.
Beneficial Ownership Information Reporting - 2024 Q4 Update
Congress enacted the Corporate Transparency Act (CTA) on Jan. 1, 2021, as part of the 2021 National Defense Authorization Act. The goal of CTA is to prevent the formation companies that are created as part of a criminal or terrorism plot (hence it being part of the 2021 National Defense Authorization Act).
Why does this matter to you? Well, the act requires filers to report the identity of their owners upon the formation of the company and on every occasion that such information changes. Companies existing prior to Jan. 1, 2024, have until Jan. 1, 2025, to file initial reports. Otherwise, new companies should have reported shortly after formation. If you have not filed yet, you should consider doing so. Please schedule a meeting with The Newby Law Office, LLC to discuss your requirements (Click to Schedule). You can learn more by visiting the Financial Crimes Enforcement Network webpage.
However, Courts have stopped this process. An Alabama Court decided that The Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.). This stopped a limited amount of companies from being required to file. But then, on Dec. 3, 2024, a Texas Court made the block nationwide. In Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (E.D. Texas) the judge ruled that “[a] nationwide injunction is appropriate in this case,” which means that “reporting companies need not comply with the CTA’s Jan. 1, 2025, BOI reporting deadline pending further order of the Court.”
How does this effect you? First, we need to determine if this law applies to your company. Some companies are excluded. BUT, you should error on the side of caution because the fines for not doing so are steep. Further, the Courts have not come to the same conclusion, the FINCEN website is still accepting filings, and the FINCEN does not discuss the Texas case yet. Therefore, the decision on whether to file is something that needs to be discussed with your attorney. Schedule a time to discuss this issue with your attorney by Clicking Here.
* This page will be updated if new information is made available.