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Update 12/27/24

An injunction was placed on the CTA requirements in December, which was lifted but then reinstated in the last week. Given the back and forth nature of this issue, those who have not yet filed, but may need to, should prepare the necessary information and be ready to file if the requirements would again be reinstated. 

The Legal with Leah linked below was recorded Dec. 17.

Some breaking news about the Corporate Transparency Act. As you have heard Ohio Farm Bureau’s Associate General Counsel Leah Curtis on the Legal with Leah podcast, there was a deadline coming soon for most companies to file some information to the federal government. Seems that deadline has been eased a bit in light of some recent court decisions.

Listen to Legal with Leah, a podcast featuring Ohio Farm Bureau’s Policy Counsel Leah Curtis discussing topics impacting farmers and landowners.

Transcript

Ty Higgins [00:00:00] Some breaking news about the Corporate Transparency Act. As you’ve heard Ohio Farm Bureau’s Associate General Counsel Leah Curtis and I talk about here on the Legal With Leah podcast, there was a deadline coming soon for most companies to file information to the federal government. Seems that deadline has been eased a bit in light of some recent court decisions.

Ty Higgins [00:00:21] This is pretty good news, but not great news yet. But let’s start with reminding us what the Corporate Transparency Act is in the first place.

Leah Curtis [00:00:30] So as we’ve talked about, this was a bill that was passed into law with the intent of addressing money laundering through shell companies. And what really was required under this law is that most businesses that are registered with their state, typically their secretary of state, they have to file information about beneficial owners with the Financial Crimes Enforcement Network. And the deadline originally for all businesses that were created prior to 2024 was that they had to submit that beneficial owner information by January 1, 2025.

Ty Higgins [00:01:01] But as I mentioned, now that has been put on hold a bit due to a court case. Explain what happened.

Leah Curtis [00:01:07] So there has been a number of lawsuits over the Corporate Transparency Act, at least probably four or five, and they all allege in some way that the Corporate Transparency Act is unconstitutional or unlawful in various ways. In several of those, the court has allowed the law to remain in effect while that litigation was ongoing. But last week, a district court judge in Texas ruled that a temporary injunction should be placed on the Corporate Transparency Act, meaning that it cannot be enforced, nor can any of its regulations or its deadlines be enforced while that temporary injunction is in place.

Ty Higgins [00:01:42] Now, I mentioned this is good news, but maybe not great news yet because this means the law is pushed, maybe pushed back a bit, but not gone for good, right?

Leah Curtis [00:01:52] The temporary injunction is called that because it’s intended to be in place while the litigation is ongoing. But that injunction is usually not issued unless a judge finds there is what we call a substantial likelihood of success for the person who requested it. So this is a good sign that it has been issued. And it does mean, again, that all those deadlines are on hold and nothing can be enforced. That being said, the government has already filed an appeal. So we will be continuing to watch how this progresses and we will, of course, be providing any updates if anything does change as we move forward.

Ty Higgins [00:02:25] I know that we’ve gotten a lot of questions about this as we talked about that deadline. So what does it mean for those that maybe have already filed, those who haven’t filed yet? What does this mean for everyone that has been concerned about CTA?

Leah Curtis [00:02:39] So, as always, people should discuss this with their own advisors or their legal counsel. But for those who didn’t file anything yet, the government can’t enforce those deadlines or put any penalties while that injunction is pending. So that means the January 1 deadline is not going to be currently in effect and people don’t have to meet that deadline. Again, there is that appeal pending. So we’re going to be watching for any updates or anything that might change. The Financial Crimes Enforcement Network is still accepting voluntary reports if someone wanted to do that. But again, they cannot enforce. There is no requirement at this time. If you did file already, there’s really nothing for you to do for now. The court has not issued any directive because, again, this is a temporary injunction. They are going to finish out that litigation and make a finding. And so if it would ultimately be overturned, it’s likely the court would make some sort of directive as to any information that’s already been collected as well. So that will be something we’ll have to sit tight and see how things play out.

Ty Higgins [00:03:33] And of course, as those things play out, we’ll keep you posted right here on the Legal with Leah podcast. Ohio Farm Bureau’s Associate General Counsel Leah Curtis. Thanks for the info.

Leah Curtis [00:03:41] Thank you.