Navigating the Corporate Transparency Act: What You Need to Know About BOI Filing

As of December 26, 2024, the requirements for filing Beneficial Ownership Information (BOI) under the Corporate Transparency Act (CTA) have been temporarily halted due to a court order. While this pause may offer a reprieve, it has also created confusion for businesses and nonprofits. Let’s break down what this means and how to stay prepared.

What Is BOI Filing?

BOI filing refers to the process of reporting key information about a company’s beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners include individuals with significant control over or substantial interest in a business.

Under the CTA, companies must typically provide:

Full legal names of beneficial owners
Current residential or business addresses
Government-issued ID numbers (e.g., passport or driver’s license)

Current Status: Filing Is Halted

Due to a court order, FinCEN has paused the requirement for BOI filing. While companies are not required to file BOI at this time, they may still choose to do so voluntarily.

It’s important to note that this is a temporary situation, and the requirements may resume depending on further legislative action or court rulings.

Who Is Affected?

Nonprofits: Active 501(c)(3) organizations are exempt. However, nonprofits that do not have 501(c)(3) status may need to comply with future BOI filing requirements.
Small Businesses: Businesses created by filing with U.S. state or tribal jurisdictions may be subject to BOI requirements if the CTA’s implementation resumes.

What Should Organizations Do Now?

While filing is not currently required, it’s critical to stay informed and prepared. Here’s what you can do:

Maintain Accurate Records: Ensure your organization’s beneficial ownership information is up-to-date. This includes legal names, addresses, and ID details.
Stay Informed: Follow updates from FinCEN and other regulatory bodies to avoid missing any changes to the CTA requirements.
Assess Your Readiness: Nonprofits and small businesses should evaluate their compliance and reporting practices to identify areas for improvement.
Minimize Risk: Staying ahead of compliance changes can help avoid penalties, manage costs, and protect sensitive information.

Why Staying Updated Matters

The CTA’s back-and-forth has created uncertainty, but preparation remains key. Nonprofits and small businesses need to be proactive in understanding how BOI filing might affect them. Proper compliance not only minimizes legal risks but also ensures that organizations can focus on achieving their goals without unnecessary disruptions.

Stay Ahead of the Curve

The Corporate Transparency Act may be on pause, but the need for awareness and preparation is more important than ever. By staying informed and proactive, your organization can navigate these changes confidently and position itself for long-term success.

Follow us for the latest updates and insights on the CTA and BOI filing.