FinCEN BOI FILING REQUIREMENTS SUSPENDED… AGAIN….

The Corporate Transparency Act (“CTA”) introduced a new reporting requirement for Beneficial Ownership Information (“BOI”), which went into effect Jan. 1, 2024. Enforced by the Financial Crimes Enforcement Network (“FinCEN”), the requirement states that reporting companies must disclose detailed information about their Beneficial Owners and Company Applicants.

However, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction prohibiting the federal government from enforcing the CTA on a national basis. Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.). The Court’s preliminary injunction effectively suspended enforcement of the BOI reporting requirements. On Dec. 23, 2024, the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction. Thus, the requirement for reporting companies to file BOI reports was back in effect, with a short deadline extension granted to Jan. 13, 2025, for most filings. Then, in an unanticipated ruling on Dec. 26, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit reestablished a national injunction that again suspended FinCEN’s prosecution of BOI reporting obligations. This latest ruling vacated the same court’s order from three days earlier granting a stay of the injunction. Per commentary released on Dec. 27, FinCEN intends to comply with the ruling, stating: 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. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

As is apparent, the BOI registration requirements continue to remain in flux, and forthcoming rulings may require swift action by reporting companies on brief notice. Reporting companies must be prepared to quickly file if future rulings favor of either party. It is inevitable that further rulings will be issued, and although the timing is indefinite, these rulings could be issued very quickly.

Please see our blog post of December 9, 2024 for additional information regarding the CTA and the associated BOI filing requirements.

For more information regarding the information in this post or any other business-related legal issues, please contact Shawn P. Dontigney at sdontigney@spdlawllc.com or 860.338.4997.

LEGAL DISCLAIMER

This blog article provides general information about the CTA. This information does not constitute legal advice, and we

encourage you to consult with an attorney for advice tailored to your specific situation. SPD Law only provides advice related to

CTA compliance to its current clients and only when there is a written agreement to do so.

These communications do not create an attorney-client relationship between SPD Law and you or your company, or create any

duty by the Firm to provide advice with respect to the CTA. SPD Law is further not responsible for providing updates about

future developments regarding the CTA, including with respect to ongoing litigation challenging the CTA.