Important Update on Beneficial Ownership Reporting Requirements

A recent federal court order has temporarily stopped the enforcement of the filing requirements for beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN).

Therefore, at this time, reporting companies (existing and newly organized) are not required to file beneficial ownership information reports and will not be held liable for failing to do so while the order remains in force.

The reporting companies, however, may file their reports voluntarily.

On December 3, 2024, in Texas Top Cop Shop v. Garland, Judge Amos L. Mazzant of the United States District Court for the Eastern District of Texas issued a preliminary injunction against the Corporate Transparency Act (31 U.S.C. § 5336) (the “CTA”) and the enforcement of the reporting rules under 31 C.F.R. 1010.380, finding that the CTA is an unconstitutional overreach by Congress. This stay was issued in conjunction with the upcoming compliance deadline. Practically, this means that the December 31, 2024, deadline for beneficial ownership reporting by companies in existence as of December 31, 2023, has been suspended until further order of the Court. The newly organized reporting companies need not report beneficial ownership information under the deadlines applicable to such companies.

We will continue to monitor developments closely, as the court order may change, and will keep you informed to help you prepare for any updates or new deadlines.

If you have questions about how this order impacts your organization or would like assistance with voluntary submissions, don’t hesitate to reach out to our office or visit the FinCEN website at https://fincen.gov/boi.

This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and do not reflect the opinion of the LLG. Please note that this article may have been generated using AI technology.