As we approach the end of 2024, the deadline for nearly 32 million companies to comply with their reporting obligations under the Corporate Transparency Act (CTA) is right around the corner. As we first reported at the beginning of this year, the CTA officially went into effect as of January 1, 2024. Many companies impacted by the CTA decided to take a “wait and see” approach to filing the required BOI reports on the chance that the obligations imposed under the CTA may be set aside by the end of 2024. In March of 2024, the Northern District of Alabama declared the CTA unconstitutional, however, the court did not issue a blanket ruling prohibiting enforcement of the CTA to parties other than the plaintiffs who filed the lawsuit. Since that time no court has issued an order setting aside the mandates of the CTA. In July of 2024, Treasury Secretary Janet Yellen confirmed that the requirements under the CTA will stand.
What this means for small businesses?
Most small business are expected to be impacted by the reporting requirements of the CTA. Although the CTA provides 23 exemptions from reporting, the exemptions from the reporting requirements are not applicable to the vast majority of small businesses. For these impacted small business and companies, the filing deadline is January 1, 2025. The failure to comply remains stiff, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties, including imprisonment of up to two years and/or a fine of up to $10,000.
The Attorneys at O’Reilly Rancilio Are Here to Help You Navigate the CTA.
The best way to avoid any negative consequences in connection with the CTA is to take a proactive approach as soon as possible. Please don’t hesitate to contact Charles E. Turnbull at cturnbull@orlaw.com or Arvin F. Zora at azora@orlaw.com if you have any questions regarding with your reporting requirements.
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