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ACCNJ ALERT |
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Dear {{CFirstName}}:
ALERT: Corporate Transparency Act
In October, the ACCNJ’s Legal & Insurance Report outlined the Corporate Transparency Act (“CTA”), which requires certain entities that meet the definition of “reporting companies” to file beneficial ownership information ("BOI") reports with the Financial Crimes Enforcement Network (“FinCEN”). The original filing deadline for initial BOI reports was December 31, 2024. However, in response to one of several challenges to the constitutionality of the CTA, the U.S. District Court for the Eastern District of Texas recently issued a nationwide preliminary injunction suspending the enforcement of the CTA and its Implementing Regulations.
The federal government filed a notice of appeal on December 5, 2024, and FinCEN has stated that it will comply with the injunction but will continue to accept filings on a voluntary basis while the litigation is ongoing. That being said, the injunction is a temporary suspension of enforcement of the requirement to file, and resolution of the primary court case could take time. As a result, entities that have not yet filed may want to continue to prepare their filings, as the preliminary injunction may be limited or overturned, resulting in a new deadline being imposed on short notice.
It is important to note that the CTA applies strictly to reporting companies, and a robust list of exempt entities, such as large operating companies, still exists. To qualify under the large operating company exemption, an entity must: (1) employ more than 20 full-time employees in the U.S. (generally working at least 30 service hours per week); (2) have an operating presence at a physical address in the United States; and (3) have filed a federal tax return for the previous year showing more than $5,000,000 of gross receipts.
ACCNJ staff will continue monitoring the status of the preliminary injunction and will alert members of any future developments and updated deadlines. |
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Regards, Jon Slater Associated Construction Contractors of New Jersey |
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Associated Construction Contractors of New Jersey |