Corporate Transparency Act Is Back, With March 21 Filing Deadline

It's back. Again. After being batted back and forth by various courts for weeks, the on-again, off-again Corporate Transparency Act (CTA) is back in effect.

Most co-op boards and many condo boards have until March 21 to file beneficial ownership information with the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN).

Last week, the U.S. District Court for the Eastern District of Texas stayed the nationwide injunction it had previously issued in Smith, et al. v. U.S. Department of the Treasury. That court cited the U.S. Supreme Court’s subsequent ruling in McHenry v. Texas Top Cop Shop, Inc., which stayed the injunction previously issued by the Fifth Circuit Court of Appeals.

But this is the CTA, so nothing is final, including the new filing deadline. FinCEN stated that it “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN also stated that it “intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.” Those lower-risk entities may include co-op and condo boards.

Despite the ongoing uncertainty, most attorneys are advising their co-op and condo clients to comply with the March 21 filing deadline. In a typical client advisory, the law firm Cozen O'Connor states: "Because it is uncertain whether or when FinCEN may further modify this deadline, we suggest that companies complete any analysis necessary to determine whether they are required to make any CTA filing and be prepared to file no later than March 21, 2025, unless a later deadline applies based on such company’s specific circumstances."

The law has teeth. Failure to comply with BOI reporting requirements can result in significant penalties, including fines of up to $10,000 and potential criminal liability. For more details and to file your BOI report, visit FinCEN’s E-Filing System.

As originally written, the CTA required more than 32 million businesses, including co-op and some condo board directors, to submit beneficial ownership information to the Treasury Department by Jan. 1, 2025. (“Beneficial owners” are defined as people who ultimately own 25% or more of the company, or exercise significant control over it.) The law was intended to bring greater transparency to limited liability companies in an effort to combat money laundering, fraud tax evasion and other crimes.