Businesses are once again required to file beneficial ownership documents to comply with the Corporate Transparency Act after a recent court ruling.
The new deadline for filing the documents with the Financial Crimes Enforcement Network is March 21.
On Feb. 14, the United States District Court for the District of Maine granted summary judgment for the Department of Treasury in a challenge to the CTA, finding the CTA to be a valid exercise of Congress’ powers under the Commerce Clause of the U.S. Constitution. The U.S. District Court for the Eastern District of Texas stayed its preliminary injunction from Jan. 7.
Effective Jan. 1, 2024, the CTA requires many companies, including many NIADA dealer members, to report information about their beneficial owners to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The information was due by Jan. 1, 2025 for entities in existence as of Dec. 31, 2023, and within 90 days of formation for entities that were formed in 2024.
Corporations, limited liability companies and limited partnerships are required to file with limited exceptions.
Required information to be reported in the initial BOI report about the reporting company includes: (a) its full legal name; (b) any trade names, “doing business as”, or “trading as” names; (c) the current street address of its principal place of business if that address is in the U.S., or, for reporting companies whose principal place of business is outside the U.S., the current address from which the company conducts business in the U.S.; (d) its jurisdiction of formation or registration; and (e) its Taxpayer Identification Number.
Required information to be reported in the initial report about each beneficial owner include: (a) the individual’s name; (b) date of birth; (c) residential address; and (d) an identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document.
The penalties for filing false beneficial ownership information or for failure to report or update beneficial ownership information are: (i) civil penalties of $500 for each day that the violation continues or has not been remedied; and (ii) a criminal fine of up to $10,000, imprisonment for up to two years, or both.
