For our business-owning clients and those with significant influence in a corporation or partnership:

A Short Summary of the Issue at Hand

This year, as part of the Corporate Transparency Act, Beneficial Ownership Information (BOI) reports became mandatory for all reporting companies registered with a U.S. State or Tribal jurisdiction. Any individual with 25%+ interest in the business, or substantial control (defined as a senior officer, authorized decision maker, or anyone with appointment/removal authority), must be included in the report. Under the initial formation, these reports were to be filed with FinCEN (the Financial Crimes Enforcement Network) by 01/01/2025; the consequence for not filing timely involved a heavy fine, calculated daily.

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide, preliminary injunction against the BOI reporting requirements and a stay for all deadlines involved therein.In response, FinCEN released the following statement on the BOI website:

“While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

What This Means for You

Mandatory BOI reporting is on hold until further action is taken by the court and, as of now, the 1/1/25 deadline will not be enforced.  The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district court’s decision on December 5, 2024. Depending on the outcome of the continued litigation, BOI reporting may become required at a later date.

Please contact your attorney for further advisement on how to proceed. As a quick reminder, these forms are considered legal practice and our firm is not cleared to prepare them for our clients.