A recent ruling in a federal district court has changed the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements for some, but not all. It’s important to understand if you are part of the group that no longer needs to file, or if the filing requirements for your business are still valid.
On March 1, 2024, a federal district court in the Northern District of Alabama ruled in National Small Business United v. Yellen that the CTA Act is unconstitutional. The decision states the Department of the Treasury and FinCEN cannot require any of the plaintiffs to comply with the CTA, and along with it, related BOI requirements.
Who are the plaintiffs? In addition to Isaac Winkles and any reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association and any of its members as of March 1, 2024, will not have to report BOI at this time.
The long-term impact of this ruling on BOI reporting is yet to be determined. For now, the ruling only applies:
As the situation unfolds, if your entity does not fall into one of the 23 exemption categories from the CTA or it is not one of the parties affected in this district court case, you may still have a federal BOI reporting requirement. As a reminder, below are the federal reporting deadlines:
| Date Company Was/Is Established | Initial BOI Report Submission Deadline |
|---|---|
| Prior to Jan. 1, 2024 | Jan. 1, 2025 |
| On or after January 1, 2024, and before January 1, 2025 | 90 days from formation |
| 2025 or later | 30 days from formation |
Additionally, the federal court case does not appear to impact New York’s state BOI reporting requirements, due on the following dates:
| Date of LLC Formation/Authorization to do Business in NY | NY BOI/NY Statement of Exemption Due Dates |
|---|---|
| On or before December 21, 2024 | January 1, 2025 |
| After December 21, 2024 | At the time of filing articles of organization or applying for authority to do business in NY |
We recommend consulting with your legal counsel to determine your entity’s filing requirements under the CTA and to fully understand the impact this court decision has on your business.
Contact Kelly Anzevino at kanzevino@cohencpa.com or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law with your legal counsel.