Nationwide Injunction on Corporate Transparency Act Mandatory Filing of Beneficial Ownership Information Reports Requirement Remains in Effect

The Corporate Transparency Act (CTA) established certain beneficial ownership information (BOI) reporting obligations for most non-exempt entities either formed or registered to do business in the United States.  Ahead of FinCEN’s original January 1, 2025 BOI reporting deadline, a Texas District Court issued an injunction temporarily suspending the reporting obligations in Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478, on the basis that the CTA was unconstitutional.  As a result, BOI reporting obligations were temporarily suspended on December 23, 2024.  On December 26, 2024, however, the Fifth Circuit Court of Appeals lifted the injunction imposed by the Texas District Court and FinCEN responded by providing a slight extension for reporting companies to comply by January 13, 2025.  Two days later, the Fifth Circuit reversed its decision and re-imposed the injunction, putting further uncertainty on the future of the CTA’s BOI reporting obligations.  And, most recently, the U.S. Supreme Court lifted one federal court’s nationwide injunction but not another federal court’s similar injunction and thus a nationwide injunction remains which will be addressed in March 2025.  For the time being, BOI reporting obligations are entirely voluntary but companies are advised to pay close attention to the quickly-shifting landscape and may consider gathering the requisite information in the event the CTA and associated reporting obligations are ultimately deemed constitutional.  For more information about the BOI reporting obligations, please visit FinCEN’s website at www.fincen.gov/boi.