Important Reminder – Corporate Transparency Act Filing Obligations – Corporate Governance

This is a reminder that pursuant to the Corporate Transparency
Act (“CTA”), most new and existing business entities are
required to submit a beneficial ownership information
(“BOI”) report to the Financial Crimes Enforcement
Network, also known as FinCEN. Entities formed on or after January
1, 2024 must file a BOI report within 90 days after formation,
unless the entity qualifies for an exemption. For entities formed
in early 2024, this deadline is fast approaching.

Failure to timely file with FinCEN may result in penalties of up
to $500 for each day that a company fails to provide a BOI report,
as well as potential criminal penalties. FinCEN’s BOI filing
portal can be found here: Beneficial Ownership Information Reporting
| FinCEN.gov.

On March 1, 2024, the U.S. District Court for the Northern
District of Alabama held the CTA to be unconstitutional. However,
this decision applies only to the plaintiffs in that case, and the
decision has been appealed. For the time being, business entities
must still comply with their obligations under the CTA, meaning
that newly formed entities must still meet the 90 day filing
deadline. Entities formed prior to 2024 have until the end of this
year to file their BOI reports. These entities should assess
whether they are required to file a BOI report and should collect
the necessary information from their beneficial owners, but they
may want to wait to file a BOI report until later this year, when
there will hopefully be more certainty around the CTA.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.