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Thought Leaders: A Year in the Life of the Corporate Transparency Act

By Berg Hill Greenleaf Ruscitti — Berg Hill Greenleaf Ruscitti LLP  — 

Berg Hill Greenleaf Ruscitti - Berg Hill Greenleaf Ruscitti LLP

https://bhgrlaw.com/

Boulder, Co 1712 Pearl Street 80302 Denver, Co 1525 17Th Street 80202 bhgrlaw.com • (303) 402-1600 Boulder | Denver | Cheyenne | Irvine | San Diego

On January 1, 2024, the Corporate Transparency Act (the “Act”) went into effect. The Act requires all non-exempt corporations, limited liability companies, and partnerships created or registered to do business in the United States (“Reporting Companies”) to file a Beneficial Ownership Information Report (“BOIR”) with the Financial Crime Enforcement Network (“FinCEN”). 

Reporting Companies were originally required to file BOIRs based on the dates they were formed: (1) those formed prior to January 1, 2024 were required to comply with the Act by January 1, 2025; (2) those formed between January 1 and December 31, 2024 were required to comply with the Act within 90 days after registering the business with a state; and (3) those formed after December 31, 2024 were required to comply with the Act within 30 days after registering the business with a state. The Act imposes stiff financial penalties for businesses who fail to comply.

Reporting Companies challenged the Act as unconstitutional in courts across the country. In early December 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction staying enforcement of the Act while the court hears the case of Texas Top Cop Shop, Inc. v. Garland. The government appealed the ruling to the Fifth Circuit.

In late December 2024, the Fifth Circuit initially lifted the injunction, thereby requiring Reporting Companies to comply with the Act’s reporting deadlines. FinCEN then set new deadlines for filing BOIRs. A few days later, however, a merits panel of the Fifth Circuit reinstated the nationwide injunction, prompting the government to appeal to the U.S. Supreme Court which lifted the injunction on January 23, 2025.

Meanwhile, as the nation awaited a decision by the Supreme Court in Texas Top Cop Shop, another federal court judge issued a separate nationwide injunction in Smith v. U.S. Department of the Treasury (Smith). As of the writing of this article, Reporting Companies temporarily need not comply with the extended BOIR filing deadlines in reliance on the Smith ruling. Furthermore, members of Congress have introduced legislation to try and repeal the Act. 

Now What? Many businesses have already complied with the Act and FinCEN continues to accept voluntary BOIR submissions. Those Reporting Companies that choose not to comply must keep a watchful eye on the evolving court decisions and legislative attempts to repeal the Act to determine whether compliance again becomes necessary.

If your business has questions about the Act, BOIR, FinCEN, the appellate process or more, please contact BHGR’s Corporate Group or its Appeals Group to determine if we can assist you. 

This article is informational only. The presentation or use of this information does not in any manner constitute an attorney-client relationship between BHGR and the website user. While the information on this site concerns legal issues, it is not intended as legal advice and is not a substitute for particularized advice from your own legal counsel.

On January 1, 2024, the Corporate Transparency Act (the “Act”) went into effect. The Act requires all non-exempt corporations, limited liability companies, and partnerships created or registered to do business in the United States (“Reporting Companies”) to file a Beneficial Ownership Information Report (“BOIR”) with the Financial Crime Enforcement Network (“FinCEN”).