What this means for those who have and have not yet filed
Updated Dec. 30, 2024:
After much back and forth, on Dec. 26, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit reinstated the nationwide injunction that suspends enforcement of BOI reporting obligations. This latest verdict reversed the same court’s order from three days earlier granting a stay of the injunction.
On Dec. 27, FinCEN released the following comment, demonstrating their intention to comply with the ruling:
“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. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
FinCEN’s full commentary can be found as an alert on its BOI resource page.
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On Dec. 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily suspending enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) Reporting Rule.
The injunction effectively suspends the requirement under the CTA for reporting companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) by the Jan. 1, 2025, deadline. The injunction applies nationwide.
This impacts both business owners who have yet to file their BOI report and those who have already filed.
WHAT THIS MEANS FOR THOSE WHO HAVE NOT YET FILED
For companies created prior to 2024, the ruling suspends their obligation to submit their initial BOI reports to FinCEN before the Jan. 1, 2025, deadline. For companies created in 2024, this suspends their obligation to report within 90 days of formation.
As a result, no action is required from clients to comply with the CTA at this time. While the injunction specifically mentions the Jan. 1, 2025, filing deadline, it also enjoins enforcement of other compliance requirements, including those applying to newly formed entities.
Clients may continue to file in accordance with the law if they so elect. However, there is no immediate need to prepare for CTA compliance.
Businesses should remain cautious and continue to monitor their reporting obligations. The district court’s injunction is preliminary and likely to be appealed, but it could be reversed or vacated on appeal. If compliance requirements are reinstated, there is no assurance whether or how the prior reporting deadlines may be extended.
WHAT THIS MEANS FOR THOSE WHO HAVE ALREADY FILED
This ruling is currently a temporary suspension of the requirements. It is very possible that the obligation to report BOI will be reinstated, and if so, you will already have this completed.
Your current filing status remains valid; however, you are not required to file additional updates or amendments. There is no immediate need to prepare for additional CTA compliance.
