Corporate Transparency Act Effective Again
Client Alert
Over the past several months, the federal judiciary has provided numerous rulings on the enforceability of the Corporate Transparency Act (CTA), which became effective January 1, 2024. For a more detailed overview on the CTA, click here.
On January 24th, we alerted business owners that enforcement of the CTA was barred nationwide pursuant to federal litigation in Texas (Smith v. U.S. Department of the Treasury, Case No. 6:24-cv-336-JDK). However, on February 18th, the Court in Smith lifted its previous stay which prevented enforcement of the CTA.
Due to this updated ruling, the CTA’s reporting requirements are back in effect nationwide. Non-exempt entities now have until March 21, 2025 to submit required reporting.
Entities that have not completed reporting should re-engage compliance efforts immediately to meet this updated deadline. The civil penalty for failing to file reporting required under the CTA is $591 per day, up to a total of $10,000. Note also that criminal penalties are authorized for any person who willfully (i) provides or attempts to provide false/fraudulent information, or (ii) fails to report and/or update a report previously made.
For guidance on complying with these updated requirements, business owners should reach out to their BMD legal advisors or contact BMD Member Blake Gerney at brgerney@bmdllc.com.