Recently, Wendy Rinehart with the Ohio Independent Automobile Dealers Association, distributed a memo regarding the Corporate Transparency Act (CTA). We encourage you to read her memo below in its entirety to understand how it may impact your business.
Over the past year, you may have heard about a new regulation at the federal level – the Corporate Transparency Act which required Beneficial Ownership Information (often referred to as BOI Reports). This regulation was rolled out at the beginning of 2024 and required owners of most LLCs and Corporations to file a report with the Department of Treasury disclosing the names of anyone who owned 25% or more in the company. The penalties for non-compliance are high – up to $500 a day.
Originally, the Act required any business in existence before 1/1/24 to file the BOI report before January 1, 2025, with few exceptions. Businesses formed in 2024 had 90 days from the date of creation to file, and any business formed after 1/1/25 was required to file a BOI report within 30 days.
The regulation has been subject to different legal attacks. In the summer of 2024, a Court issued an injunction prohibiting enforcement to a specific number of Plaintiffs, but it was otherwise applicable.
The more confusing attacks started on December 3, 2024, the federal court in Texas Top Cop Shop, Inc. et al. v. Merrick Garland, U.S. Attorney General, et. al, issued a nationwide injunction, prohibiting enforcement. The US Government appealed the injunction and on December 23rd to the Fifth Circuit Court of Appeals merits panel and the injunction was rolled back (meaning enforcement was back on). Then, on December 26th the Fifth Circuit motion panel reinstituted the nationwide injunction.
As of January 2, 2025 (12:00 PM EST), the nationwide injunction is in place and no reports are required to be filed. It is unclear what the future of the CTA holds but legal counsel will continue to monitor and provide members updates as there are any.
As always, we will keep you informed of any updates or changes. Please contact me at todd@americanrecoveryassn.org, if you have any questions.
Todd Squires
Executive Director
American Recovery Association (ARA)