Corporate Transparency requirement (for HOAs) on hold…

CORPORATE TRANSPARENCY ACT UPDATE: After unsuccessful legal challenges against the CTA in Oregon and Virginia, a federal court judge in Texas on December 3, 2024, issued a nationwide injunction blocking enforcement of the CTA. The government is appealing, and it is unclear if or how long the injunction will continue. While the injunction is in effect, HOAs need not comply with the CTA’s “Beneficial Ownership Information” reporting requirement. Per the FinCEN website, (fincen.gov/boi) “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force” but may voluntarily submit the reports if they choose.

The requirement: By year-end 2024, all non-exempt corporations were required to register with FinCEN and file a Beneficial Ownership Information Report (“BOIR”). A “Beneficial Owner” is someone who “exercises substantial control over the company or who owns or controls 25% of the ownership interest in the company. Per FinCen’s FAQ, HOA board members would be “Beneficial Owners” and would need to file identifying information with FinCEN.