Beneficial Ownership Filing Requirement on Hold: The Impact of the Injunction
1/2/25 UPDATE – As the World Turns
On 12/26/24, the US Court of Appeals for the Fifth Circuit reversed their 12/23/24 ruling and again paused the filing requirement of the Corporate Transparency Act. The portal is still functional, and businesses may voluntarily submit the requested beneficial ownership information. On 12/31/24, the Department of Justice filed an emergency stay of the injunction with the Supreme Court. Just like a good daytime soap opera, more twists and turns are expected as the merits of the case are reviewed at the highest level. Please visit https://fincen.gov/boi for the most up-to-date information.
UPDATE – Reindeer Games
On 12/23/24, The US Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction of the Corporate Transparency Act, effectively an “Uno Reverse”. In light of this update, FinCEN has granted extensions for filing deadlines and most covered entities now have until 1/13/25 to file. There are stiff penalties for non-compliance. Please visit https://www.fincen.gov/boi for full details.
Business owners learned a new acronym in 2024: BOI (Beneficial Ownership Information). The Corporate Transparency Act of 2021 included a requirement that all covered business entities report BOI through a FinCEN portal. The deadline for most covered entities was January 1, 2025, with stiff penalties for non-compliance. However, on December 3, 2024, a federal judge issued a preliminary injunction that pauses the enforcement of the BOI filing requirements as the case makes its way through the court system.
While the obligation for business owners to file BOI directly with FinCEN has been paused, the requirement for financial institutions to document BOI at account opening has not changed and is part of the Customer Due Diligence regulation that was finalized in 2016. The account opening process will remain consistent while the courts determine what will be required of business owners.
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More information about FinCEN’s beneficial ownership information reporting requirements are available at https://www.fincen.gov/boi. For legal advice on beneficial ownership information, please seek the advice of a lawyer or CPA about the beneficial ownership requirements for your business.
