The ping-pong game regarding compliance with the Corporate Transparency Act (CTA) continues.
On February 17, 2025, the U.S. District Court for the Eastern District of Texas granted the government’s motion to stay the nationwide injunction that had previously halted enforcement of the Corporate Transparency Act (CTA). This decision in the case of Smith v. US Department of the Treasury, No. 6:24-cv-336-JDK, was influenced by the Supreme Court’s earlier ruling to stay a similar injunction in the Garland vs. Texas Top Cop Shop, Inc. case.
As a result, the CTA’s reporting requirements are once again in effect.
In response to this development, the Financial Crimes Enforcement Network (FinCEN) issued a notice on February 19, 2025, extending the deadline for most reporting companies to submit their Beneficial Ownership Information (BOI) reports to March 21, 2025. FinCEN acknowledged that entities may need additional time to comply and indicated plans to assess options for further deadline modifications, prioritizing entities that pose significant national security risks. Additionally, FinCEN intends to initiate a process this year to revise the BOI reporting rule to reduce burdens for lower-risk entities, including many U.S. small businesses.
Implications for Illinois Small Business Owners
The CTA requires businesses, including many not-for-profit corporations, to report specific information about their beneficial owners to FinCEN. A “beneficial owner” is defined as any individual who directly or indirectly exercises substantial control over the entity or owns or controls at least 25% of the ownership interests. For condominium and homeowners associations, this typically includes members of the Board of Directors.
Entities subject to the CTA must report the following information:
- Entity Information: Legal name, address, state of formation, and employer identification number (EIN).
- Beneficial Owner Information: Legal name, birthdate, residential address, and an identifying number from an acceptable identification document (e.g., driver’s license or passport), along with an image of the document.
Given the reinstatement of the CTA’s reporting requirements, Illinois small businesses that have not yet filed their BOI reports must be filed by the March 21, 2025 deadline to avoid potential penalties. Non-compliance can result in civil penalties of up to $500 per day, capped at $10,000, and possible criminal penalties, including fines and imprisonment.
Recommended Actions
- Assess Applicability: Determine whether your organization is subject to the CTA’s reporting requirements. While there are exemptions, most condominium and homeowners associations organized as non-profit corporations are likely required to comply.
- Gather Required Information: Collect the necessary information for your entity and its beneficial owners as outlined above.
- Submit BOI Report: File the BOI report electronically through FinCEN’s E-Filing system by the March 21, 2025, deadline.
If you are uncertain about your organization’s compliance status or need assistance with the filing process, please reach out to our firm. We can confirm the actions taken and guide you through the necessary steps to ensure compliance. For assistance, please contact Christy Egan cegan@bellas-wachowski.com, and one of our attorneys will respond promptly to address your needs.
Staying informed and proactive is crucial to navigating these regulatory requirements effectively. Our team is here to support you through this process and help ensure your organization remains compliant under the Corporate Transparency Act. Call George Bellas with any questions.