On January 1, 2024, the Corporate Transparency Act (CTA) became effective, thereby requiring more than 32,000,000 small businesses to file, on or before January 1, 2025, Beneficial Ownership Information (BOI) reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
On December 3, 2024, a U.S. District Court judge in Texas issued a preliminary injunction:
- barring the enforcement of the CTA and its BOI filing requirements;
- suspending the deadline of January 1, 2025 for the filing of BOI reports; and
- declaring that entities subject to the CTA need not comply with the CTA’s filing deadline of January 1, 2025 pending further order of the court.
Although the court’s decision does not constitute a final ruling in the matter, the court determined that because the CTA and its BOI reporting requirements are likely unconstitutional, the court was warranted in issuing the preliminary injunction barring FinCEN’s enforcement of the law and its reporting obligations.
The U.S. Department of Justice is expected to appeal the court’s ruling. Moreover, FinCEN has not yet issued any guidance in response to the court’s entry of the injunction. Consequently, this remains a dynamic matter.
In the meantime, we are recommending that clients defer the filing of BOI reports as we monitor further developments in the matter. We will update this Alert as additional, material facts become available.
Explore our recent article outlining the resources available to assist in complying with the Corporate Transparency Act.