A federal court ruling has temporarily halted the enforcement of a rule under the Corporate Transparency Act (CTA) that requires small businesses to disclose ownership information to combat money laundering. The U.S. District Court for the Eastern District of Texas issued a preliminary injunction citing constitutional concerns. While the injunction is in place, reporting is voluntary, but penalties of up to $10,000 and two years in prison remain a risk if the ruling is overturned. The Department of Justice has appealed the decision, leaving businesses in legal uncertainty.
What's NewA court battle has paused a rule requiring small business es to disclose ownership information to combat money laundering , but penalties of up to $10,000 loom if it returns.Why It MattersA rule under the Corporate Transparency Act , passed in 2021, requires small business owners to register personal information with the Financial Crimes Enforcement Network .However, enforcement is on hold following a December 3 federal court ruling.What To KnowThe U.S.
is burdensome and would create fear among small businesses.'Optima Office CEO Jennifer Barnes, to the Associated Press: 'A recent stay regarding FinCEN's Beneficial Ownership Information Reporting is just that––a stay. The prudent course of action is to file before the previously determined deadline on January 1 as there is no guarantee of a deadline extension if the stay is overturned.
Corporate Transparency Act Money Laundering Small Business Ownership Disclosure Fincen
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