BOI and CTA and FinCen - OH MY!!!

Hey guys! Chances are, you've been hearing some new acronyms lately! Let's break them down, then talk about what is going on with them! SPOILER - IT'S GOOD NEWS!

BOI - Beneficial Ownership Interest

CTA - Corporate Transparency Act

FinCen - Financial Crimes Enforcement Network

YIKES - that doesn't sound good on the surface, does it? Well, no. A few years ago, a law was passed called the CORPORATE TRANSPARENCY ACT, which required business owners to file a BENEFICIAL OWNERSHIP INTEREST report, with the FINANCIAL CRIMES ENFORCEMENT NETWORK.

Basically, the government wanted to get contact information for every business owner, partner, shareholder, or anyone with "beneficial interest" in a business, all across the country. Because, you know, someone might try to commit a financial crime, and they would need that contact info. BLEH!

And, all businesses started in 2024 were supposed to file this report within 90 calendar days of starting. And by starting, they meant the business name (or assumed business name) was registered with the state in which it was formed. So, filing as an LLC, registering an assumed business name or DBA "doing business as" name, as a nonprofit, or a corporation - all those things - basically filing anything with the state to declare a business - was considered "starting a business."

And, all businesses "started" prior to 2024, had to file this BOI report with FinCen no later than Dec 31, 2024.

Failure to file by the proper deadline could result in penalties of up to $500 per day. So, they really meant business.

Now that we're in December, many business owners have been scrambling to get this done, and/or stressing out over it. (Hint, me included!)

But wait, here comes Texas to the rescue! The Fifth Circuit Court in Texas has ruled this new reporting law as unconstitutional, and declared that is in unenforceable in all 50 states! Which is GOOD!

That means that as of this morning, no business owner is required to comply with this reporting law.

Now, will the government appeal this decision and injunction? Yes, almost certainly. However, many experts feel that the appeals court is unlikely to reverse the decision, and that the Supreme Court would also declare the law unconstitutional.

So, for now, business owners DO NOT have to file this report. You certainly may do so, if you desire to, but you are NOT required to, at this time.

We will, of course, be watching this case closely, and if it is reversed, we will certainly let you know. If it is reversed prior to the end of the year, there is the possibility that the Dec 31st deadline will still apply, so stay tuned, and be prepared to get it filed, if you haven't done so already, just in case.

As always, if you have any questions or comments, drop them below!

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