DECEMBER 23, 2024 – A federal Court of Appeals decision has reinstated the requirement under the Corporate Transparency Act (CTA) for filing requirements have been reinstated. Reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. (Those who fail to meet this deadline could face up to two years imprisonment and fines up to $10,000, in addition to civil penalties of up to $591 per day.)
While you may feel like the ping pong ball in this game of regulatory back and forth, you must be prepared to mitigate the risks to you and your business. Should additional rulings affect the applicability of this regulation for you and your business, we will let you know. Until then, if you are a reporting company, you are required to file by January 13, 2025, or based on the revised schedule below.
TELL ME MORE:
- Who needs to file:The CTA’s reporting requirements apply to “reporting companies,” which includes corporations, limited liability companies and any other entities created by the filing of a document with a secretary of state or any similar office in the U.S.
- Filing exemptions:There are 23 categories of entities specifically exempted from the reporting requirements, including a “large operating company” exemption. A “large operating company” is an entity that (1) employs more than 20 full-time employees in the United States, (2) has an operating presence at a physical office within the United States, and (3) has filed a federal income tax or information return in the United States for the previous year demonstrating more than $5 million in gross receipts or sales.
- Applicability to dealerships:It is likely that dealerships are exempt from the rule under the “large operating company” exemption and not required to file. However, separate corporations or limited liability companies associated with a dealership (i.e., a real estate holding company) may be required to file. Dealerships should work with an attorney or accountant familiar with their business and business structure to determine if an exemption applies and whether to file.
- What information must be reported:A reporting company must disclose certain information about the reporting company itself, its “beneficial owners” and, for reporting companies formed on or after January 1, 2024, a maximum of two “company applicants.”
- How to file:Reporting companies must report beneficial ownership information electronically through FinCEN’s website.
IMPORTANT DEADLINES (UPDATED):
In response to the December 23, 2024 ruling, the Department of the Treasury has extended the reporting deadline as follows:
- Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
- Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
GO DEEPER: To learn more about this reporting requirement:
- FinCEN’s BOI Webpage
- Frequently Asked Questions
- Small Entity Compliance Guide(i.e., not enforceable).
If you have questions or concerns, please contact INEDA using the information below:
Mark Hennessey – Ph: 515.231.7655
Or contact your local Director of Dealer and Government Relations:
Jamie Mertz, IA – Ph: 515.320.3314
Phil Erdman, NE – Ph: 402.429.5726