UPDATE: As of December 3, 2024, a preliminary, nationwide injunction has been issued regarding the Beneficial Ownership Information (BOI) report associated with the Corporate Transparency Act. A U.S. District Judge issued a nationwide preliminary injunction prohibiting the Federal Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA) and the final rule implementing it (Reporting Rule) on Dec. 3 in the case Texas Top Cop Shop, Inc. v. Garland (E.D. Tex.).

LEGAL FACTS: Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction that: (1) enjoins the CTA, including enforcement of that statute and regulations implementing its beneficial ownership information reporting requirements, and, specifically, (2) stays all deadlines to comply with the CTA’s reporting requirements. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.

WHAT IS FinCEN’s OPINION? FinCEN has state “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.” https://fincen.gov/boi

WHAT DOES THIS MEAN? The immediate impact is that LLC companies and the like are currently not required to file a BOI report with the FinCEN by January 1, 2025. 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.

DOES THIS MEAN I DON’T EVER HAVE TO FILE A BOI REPORT? Not necessarily. The U.S. government has already filed a notice of appeal on December 5, 2024, to appeal this preliminary injunction. Therefore, it is possible the injunction could be removed, and CTA filing requirements be reinstated and no guarantee of any extension to the applicable deadlines. Therefore, those required to file should keep up to date on the current situation and should something change.

CAN I STILL FILE ANYWAY? Yes. As of the date of this article, FinCEN is still accepting voluntary BOI reports. Reporting companies may continue to voluntarily submit beneficial ownership information reports.

If you have questions regarding this or any other topic please reach out to our team at (651) 439-2878.