The beneficial ownership information (“BOI”) reporting deadline has been in flux, as the 2024 calendar year comes to a close. The January 1, 2025 deadline, which was temporarily suspended due to a national injunction, was reinstated before being suspended yet again. Business owners should be mindful of their compliance obligations generally. For general information on BOI reporting, please reference our previous insight: Be Mindful of Your Beneficial Ownership Information Reporting Requirements.
In 2021, Congress passed the Corporate Transparency Act, which created a new beneficial ownership information (“BOI”) reporting requirement for certain companies. These companies must report the requested information to the Financial Crimes Enforcement Network (“FinCEN”), which is a bureau of the U.S. Department of the Treasury.
Reporting companies must report their BOI depending on when the company was (or is) created or registered:
· A reporting company created before January 1, 2024, has until January 1, 2025, to file its initial BOI report;
· A reporting company created on January 1, 2024, but before January 1, 2025, has 90 calendar days after receiving notice of the company’s creation/registration to file its initial BOI report;
· A reporting company created on or after January 1, 2025, has 30 calendar days after receiving notice of the company’s creation/registration to file its initial BOI report.[1]
On December 3, 2024, a federal district court in the Eastern District of Texas issued an order granting a preliminary injunction. This national preliminary injunction, issued in Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), provided for, in part, a stay on all compliance deadlines outlined in the CTA.
In response, the Department of Justice appealed the decision on December 5, 2024.
On December 23, 2024, the Fifth Circuit Court of Appeals issued an order, granting the Department of Justice’s motion for a temporary stay of the federal district court’s injunction while the appeal is pending. The order provided, in part:
The Corporate Transparency Act (“CTA”) obliges certain nonexempt companies to report the identity of their beneficial owners and applicants for incorporation. 31 U.S.C. § 5336. On December 3, 2024—less than one month before the crucial January 1, 2025 reporting deadline—the district court granted Plaintiffs-Appellees’ (the “Businesses”) motion for a preliminary injunction and entered a nationwide injunction enjoining the CTA and the corresponding Reporting Rule. Id.; 31 C.F.R. § 1010.380. The district court concluded that both are unconstitutional and issued nationwide injunctions against each, despite no party requesting it do so and despite every other court to have considered this issue tailoring relief to the parties before it or denying relief altogether.
The government, Defendants-Appellants, filed an emergency motion with this court seeking a stay. Because the government has met its burden under Nken v. Holder, 556 U.S. 418 (2009), we GRANT its motion for a temporary stay of the district court’s order and injunction pending appeal.
Texas Top Co Shop, Inc., et al. v. Garland, et al., No. 24-40792 (5th Cir.).
As a result, the Fifth Circuit’s decision effectively lifted the national injunction and reinstated the CTA’s original deadline of January 1, 2025. In response, FinCEN generally implemented an extension of the January 1st deadline to January 13th.
In the span of three days, on December 26, 2024, the Fifth Circuit Court of Appeals vacated the stay and reinstated the national preliminary injunction. Accordingly, no BOI filings are currently due.
At Montgomery Legal, we continue to monitor the status of the CTA’s deadlines. While this case is pending, business owners should be mindful to comply with the CTA’s original deadline. FinCEN has published many resources on its website (https://www.fincen.gov/boi) to address multiple questions associated with BOI reporting obligations. However, Montgomery Legal is ready and willing to help you with your reporting requirements.
Contact Montgomery Legal today to discuss your BOI reporting with a dual-credentialed attorney and CPA. Schedule a Consultation, email us at info@mlegaltx.com, or call (214) 432-6100.
[1] Id.
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