Big News for Businesses Across the USA: Has the Injunction Against the Corporate Transparency Act Been Lifted?
Paul Carroll breaks down what this ruling means to small business owners in simple terms.
Big news for businesses across the United States: The injunction against the Corporate Transparency Act has been lifted. Or has it?
What you need to know
The Corporate Transparency Act is an anti-money laundering act, and comes with something called the Beneficial Ownership Information Reporting Requirement that had a January 1st, 2025 deadline. Though this law was a long time coming, it probably will stand in the end, at least with some kind of modification. What happened was that a federal judge in Texas initially ruled this law as possibly unconstitutional and the enforcement needed to be stalled… Reasonable enough. Then, this Monday, a higher court stated, “No, the injunction is overturned. The January 1st deadline sticks.” The Treasury then came back and said, “All right, January 1st isn’t reasonable for people who’ve waited. We’re going to push the deadline back to January 13th.” Well, then, the New Orleans Fifth U.S. Court Circuit reinstated the injunction!
There is no way to tell what’s going to happen next. We cannot say when this injunction will be lifted, or whether or not it even will be lifted.
To whom does this apply?
Mostly small business owners… and there’s a lot of business owners who have entities for other non-business purposes. There are five core exemptions, and maybe a couple of others, that are listed in a booklet on the federal government site.
You may also seek legal counsel.
Why is this such a big deal?
The penalties for non-compliance are $500 a day, and up to $10,000. It is likely in the early days of this law, once they finally decide when the deadline is, there will be a grace period when they’re just going to send you a letter and say, “Hey, what’s with the failure to comply?” They do have some pretty fancy software to cross-check and triangulate those who should have complied and have not.
So, with regards to the Corporate Transparency Act, stay informed, stay compliant, protect your business, and call me with your questions about this or any other features regarding to your business and your wealth. We wish you the best of investment success.
Paul is the founder and CEO of Avion Wealth, LLC. He leads a team of wealth managers in building and executing financial plans for high net worth individuals and families. Contact Avion Wealth to speak with a financial advisor.