CTA UPDATES

LEGISLATIVE UPDATES ON CTA - The Corporate Transparency Act (CTA) is a focal point of legislative activity in the U.S. Congress. On February 10, 2025, the House of Representatives passed a bill extending the deadline for small businesses to comply with the CTA's beneficial ownership information reporting requirements by one year. This extension aims to provide businesses with additional time to prepare for compliance. Concurrently, Republican lawmakers have reintroduced the "Repealing Big Brother Overreach Act," seeking to repeal the CTA entirely. Introduced by Senator Tommy Tuberville (R-Ala.) and Representative Warren Davidson (R-Ohio), this bill has garnered significant Republican support but lacks bipartisan backing. The proposed repeal reflects ongoing concerns among some legislators and business groups about the potential burdens and privacy implications of the CTA. See The Wall Street Journal These legislative developments occur against a backdrop of legal challenges that have temporarily halted the enforcement of the CTA. While the Supreme Court has lifted a nationwide injunction against the law, a separate court injunction remains in effect, leaving the CTA's enforceability uncertain. As a result, are businesses currently required to comply with the CTA's reporting requirements? In summary, the CTA's future remains uncertain, with legislative efforts to amend or repeal the law and ongoing legal challenges affecting its implementation. CTA, enacted in 2021, mandates that certain U.S. businesses disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) to combat illicit financial activities. Initially set to take effect on January 1, 2024, the CTA faced legal challenges that delayed its implementation. In December 2024, the Fifth Circuit Court of Appeals reinstated the CTA, leading FinCEN to extend the reporting deadline to January 13, 2025. However, on January 23, 2025, the U.S. Supreme Court lifted a nationwide injunction against the CTA, allowing its enforcement to proceed. Despite this, a separate court injunction remains in place, rendering the CTA unenforceable and exempting reporting companies from filing beneficial ownership information reports and associated penalties. As of February 12, 2025, businesses are not required to comply with the CTA, and its enforceability remains uncertain pending further legal developments. Assouline & Berlowe, P.A.