December 10, 2024
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (“CTA”), and its Beneficial Ownership Information Reporting Rule (“BOI Rule”). The BOI Rule requires legal entities formed or registered to do business in the United States to report beneficial ownership information to the Financial Crimes Enforcement Network (“FinCEN”) within the U.S. Department of the Treasury.
The BOI Rule took effect on January 1, 2024, and its implementation was in two parts:
- Entities formed or first registered during 2024 have been required to file initial reports within 90 days of notice of formation or registration.
- Entities that were formed or first registered prior to 2024 would be required to file their initial reports by January 1, 2025.
It must be noted that the CTA has not been permanently overturned. The District Court issued a preliminary injunction pending the final resolution of the lawsuit challenging the CTA’s constitutionality. The final resolution on the merits of the challenge will likely take place well past the original January 1 deadline.
While the nationwide injunction remains in place, companies can suspend submitting new filings to the FinCEN database. If the injunction is lifted, either the courts or FinCEN may grant some time relief to filing parties since the injunction will very likely remain in place through January 1, 2025.
If you have any questions about this or any other matter, please contact the attorneys at Warrick & Boyn, LLP.