A NOTE FROM FRANCES
Corporate Operations Manager
In today’s dynamic regulatory environment, businesses face various compliance requirements that can be challenging to navigate. A prime example is the Corporate Transparency Act (CTA), which was introduced last year. The CTA required millions of businesses to submit detailed reports on their owners and controlling parties to the Financial Crimes Enforcement Network (FinCEN). However, the legal status of this requirement has been in flux, with businesses being told they must comply, then being told they don’t, being told again they do, and told yet again they don’t. All this back-and-forth has understandably led to confusion and frustration among business owners, legal and tax professionals, and service providers alike.
For those interested in a concise summary of the developments in the CTA injunction case, here it is: On December 3rd, a nationwide preliminary injunction was issued, temporarily halting CTA enforcement. Subsequently, on December 23rd, a motions panel of the U.S. Court of Appeals for the Fifth Circuit overturned the injunction, reinstating the beneficial ownership information (BOI) filing requirement—and granting some deadline extensions. Ultimately, on December 26th, a different panel of the Fifth Circuit vacated the earlier panel’s stay, effectively reinstating the injunction.
As of January 6, 2025, when this newsletter was circulated, reporting companies are no longer obligated to submit BOI reports. However, depending on when you are reading this—be it a day, a week, or two months after publication—the status of the CTA may have changed, as its enforcement can be altered at any moment.
Every business that falls under the CTA’s reporting requirements faces a pivotal decision: to file voluntarily or to await further developments. A number of our clients have opted to proceed with filing their BOI reports, while others have chosen to wait and see how the legal proceedings unfold. For those who choose to wait, we strongly recommend being prepared to file if the injunction is lifted again, as the timeline for compliance could change rapidly.
At Parasec, we recognize the challenges posed by these evolving requirements. We are committed to staying on top of the latest developments and will provide updates as new information emerges. For the latest insights on the CTA and other legal news, be sure to follow us on LinkedIn.
Industry News
Delaware: Annual Report Due by March 1st
Please note that all active domestic corporations registered in Delaware must file their annual reports and pay franchise taxes for the previous year on or before March 1st. It is mandatory to complete the filing and payment process electronically. Failure to file by the deadline may result in a penalty of $200 and an interest rate of 1.5% per month. If you need assistance with filing your report and paying taxes and fees, our compliance specialists are available to help. You can reach out to our team at paracorp@myparacorp.com.
Federal: FinCEN Issues Fraud Alert
On December 18, 2024, the Financial Crimes Enforcement Network (FinCEN) issued an alert to raise awareness of fraud schemes that exploit FinCEN’s name, insignia, and authorities for financial gain. One scam involves convincing companies to pay a “filing fee” to have a third party submit the company’s beneficial ownership information (BOI) report to FinCEN. In the reported scams, the fraudsters collect the money but never file with FinCEN. Instead, they deceive victims out of money and gain access to their personal information. While the filing of BOI reports is currently not required (see Manager’s Note for more details), we suspect these scams are still active. We advise clients to exercise caution when hiring a third-party provider with whom they have not worked in the past.
Maine: Misleading Solicitations
Maine Secretary of State Shenna Bellows is warning corporations and nonprofits in the state to be wary of a misleading solicitation they may have received by mail. This solicitation, from an organization identified as C.F.S., offers to file annual reports on the entities’ behalf for an exorbitant fee of $210. The form utilized by C.F.S. resembles the official annual report from the Maine Secretary of State’s Division of Corporations, but it is neither authorized nor recognized by the department. Read the official notice here.
Rhode Island: Annual Report Filing Period Opens Soon
Rhode Island LLCs, corporations, partnerships, and nonprofit corporations are required to file an annual report starting the calendar year after they register their business with the State of Rhode Island. The annual report filing period begins on February 1, 2025, and concludes on May 1, 2025. Domestic benefit corporations must file within 120 days following the end of their fiscal year.
Rhode Island: Fraud Protection Notification Service
The Rhode Island Secretary of State’s Business Services Division invites business owners to sign up for fraud protection notifications. By registering for the free service, business owners will receive email notifications every time a document is filed at the Business Services Division on their business’ behalf. This service helps ensure that no unauthorized changes are made to an entity’s corporate record. Learn more here.
Various States: Potential Delays Due to Severe Weather
Severe weather often causes unexpected office closures and processing delays across the country during this time of year. Extreme conditions can also disrupt shipping schedules. Unfortunately, we experience multiple closures nationwide on an annual basis. To prevent any unwanted postponements, we recommend submitting time-sensitive documents well in advance. For assistance with filing or retrieving a document, please email us at parasec@parasec.com.
Service Spotlight
Nationwide Registered Agent Services
While many companies offer registered agent services, providers can vary significantly in price, experience, state availability, customer service, and other factors. Since 1987, Parasec/Paracorp has provided dependable registered agent services to hundreds of thousands of entities nationwide. We prioritize privacy and accuracy in a professional environment, ensuring you receive the outstanding service you deserve. When you want more from your registered agent, consider partnering with Parasec/Paracorp. To learn more, please contact our team at paracorp@myparacorp.com.
Client Testimonial
“Paracorp has been a great asset for our company over the past 18-plus years. They are reliable, efficient, and always available when needed. Thanks to all who have assisted me over the years. You are greatly appreciated.”
~ Linda H.