Legal Bulletin: Corporate Transparency Act
Until further notice, companies do not need to file Beneficial Owner Information (“BOI”) reports.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that prohibits the federal government from enforcing the CTA. As a result, until a final decision is made, the CTA may not be enforced, and companies need not comply with the upcoming December 31, 2024 deadline for filing BOI reports.
In-Depth Information:
The Corporate Transparency Act (CTA) was enacted on January 1, 2021, as part of the National Defense Authorization Act. The CTA is intended to address and guard against money laundering, terrorism financing, and other forms of illegal financing by mandating that certain entities (primarily small and medium-sized businesses) report Beneficial Owner Information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. In short, the CTA requires that companies file a report with FinCEN that identifies the names and contact information of individuals who own or control the company. Companies had until December 31, 2024, to file their reports.
Attached is a copy of the Court’s Order. Be advised that the Order is a preliminary injunction only and NOT a final decision. In other words, while you may not have to file the BOI report for now, it doesn’t mean you will never have to file it. Instead, the Court’s Order only temporarily pauses enforcement of the CTA. Enforcement may resume if the Court’s order is overturned on appeal or the government wins the lawsuit.
Information provided by Anna Carno, Esq., Carno Law Group, UCON member.