A Federal District Court in Texas recently issued an injunction that halted the enforcement of the Corporate Transparency Act (CTA), including the beneficial ownership information (BOI) reporting rule. The injunction, which is applied nationally, means that companies which previously were required to complete the BOI reporting by January 1, 2025, will not be subject to penalties if they fail to submit the report.

The Financial Crimes Enforcement Network (FinCEN) provided the following guidance to companies: “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.”

The Texas court considered the CTA legislation to be “likely unconstitutional and outside of Congress’s power.”

The Justice Department (DOJ) filed a notice of appeal on December 5. It is expected that the US Department of the Treasury will oppose this injunction.

Dembo Jones is not preparing or filing the BOI reports. However, we will continue to monitor these developments and provide insights as new information becomes available. Please contact your legal counsel to assist your organization with the necessary steps regarding this filing.

Up-to-date information about BOI reporting is available on the FinCEN website – https://www.fincen.gov/boi