A federal district court in Texas issued a preliminary injunction that could prohibit the enforcement of the Corporate Transparency Act (CTA) and the Beneficial Ownership Information (BOI) reporting rule. This ruling means that the January 1, 2025, BOI filing deadline doesn’t have be met.
According to a U.S. District Court judge of the Eastern District of Texas, the final rule implementing the CTA (the “Reporting Rule”) is unconstitutional and outside of Congress’s power. The Court further held that reporting companies defined under the Beneficial Ownership Information requirement don’t have to comply with the CTA’s January 1, 2025, BOI reporting deadline (pending further order of the Court). Significantly, this injunction applies nationwide.
As a preliminary injunction, not a permanent injunction, it is likely to be appealed to the United States Court of Appeals for the Fifth Circuit. It is also expected that the Financial Crimes Enforcement Network (FinCEN) will issue an opinion or guidance regarding the preliminary injunction. FinCEN is a bureau of the United States Department of the Treasury. Even if the federal government appeals the ruling, the preliminary injunction would remain in effect through the appeals process.
If your company has already submitted BOI, you don’t have to do anything further at this time. If your company has not submitted BOI, you can wait until the court issues another order.
We will keep you updated on this matter as more information becomes available. For now, the January 1, 2025, deadline for submitting BOI is not enforceable. Let us know if you have any questions by contacting LvHJ.
