BOI Update: National Injunction

With FinCEN temporarily barred from requiring BOI registration, what should you do?

Lucy

12/10/20241 min read

screenshot of financial crimes enforcement network beneficial ownership information webpage
screenshot of financial crimes enforcement network beneficial ownership information webpage
Wait, what happened?

The legality of the Corporate Transparency Act (CTA) and specifically the Beneficial Ownership Information (BOI) reporting rule was challenged in federal district court as unconstitutional (Texas Top Cop Shop, Inc. vs. Garland). On December 3rd, the Fifth Circuit court issued an order prohibiting the enforcement of the CTA and the BOI reporting rule. The court stated that the injunction should apply nationally, and so the reporting rule cannot be enforced.

So what does that mean?

For now, companies don't need to comply with the BOI reporting deadline of January 1, 2025. The Department of Justice has already appealed the order, but while it's in place, FinCEN is barred from enforcing BOI filing requirements. If you own a company that was created before January 1, 2024, you no longer need to report your BOI report by January 1.

What if the BOI reporting is upheld, and my report is late as a result?

That's a great question, and since I'm not an attorney, I'm not qualified to even hazard a guess. Common sense would dictate that any fines or penalties would be waived. However, it would be wise to prepare for reporting in case it is eventually required; gather the information and documents you need to file so you can easily complete your reporting.

What if I've already filed my BOI reporting?

No harm done! If the law ends up surviving the legal challenge, then you don't have anything to do. If the law is ruled unconstitutional, hopefully any existing reports will be purged from FinCEN records.

I want to know more!

The largest plaintiff in the case is the National Federation of Independent Business, and you can follow their Legal Blog for more updates.