UPDATED 12/27/24
The enforcement of Beneficial Ownership Information (BOI) reporting requirements remains in flux, with ongoing rulings and deadline changes continuing to alter its status:
- December 27, 2024: The Fifth Circuit Court reinstated a nationwide injunction, halting the enforcement of BOI reporting requirements under the Corporate Transparency Act (CTA). This decision overrides the prior reinstatement of the requirements.
- December 23, 2024: The Fifth Circuit lifted the injunction, reinstating BOI reporting obligations and extending the compliance deadline to January 13, 2025, to give businesses additional time to prepare.
ARB continues to recommend that business owners monitor this evolving situation, consult with advisors, and stay prepared for potential future compliance obligations.
In response to a federal court ruling on December 3, businesses are being advised of the suspension of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements. The court’s nationwide injunction temporarily relieves businesses from the January 1, 2025, deadline to report ownership details to the Financial Crimes Enforcement Network (FinCEN). Previously, non-compliance risked severe penalties, including fines up to $10,000, imprisonment, and civil penalties of $591 per day.
The ruling means you are currently NOT required to:
- File BOI reports
- Collect extensive ownership documentation
- Pay associated compliance fees
For business owners, this is significant. The CTA was designed to prevent financial crimes but introduced burdensome compliance obligations. Many businesses met the criteria for reporting, which could have entailed collecting and submitting detailed personal information about beneficial owners. The ruling recognized these requirements as potentially unconstitutional, emphasizing privacy concerns and their financial and administrative impact on small businesses.
Important Cautions
The legal battle on this matter is far from over. Business owners are advised to keep in mind:
- The government is likely to appeal the injunction.
- Future administrations may seek to reinstate or modify the reporting requirements.
- Potential compliance obligations could be reinstated quickly.
Recommended Actions
- Pause Compliance Efforts: With the injunction in place, no immediate action is required.
- Prepare Contingency Plans: Keep your ownership records organized. Be ready to act if reporting requirements are reinstated to avoid penalties.
- Consult Legal Advisors: Seek professional legal advice tailored to your business’s unique situation.
- Stay Informed: Monitor updates from industry associations and legal channels.
Looking Ahead
While the injunction provides temporary relief, business owners should stay prepared for potential future reporting requirements. For now, the focus can remain on business operations. ARB will continue tracking developments to provide updates.
