Nationwide Injunction Issued Against the Corporate Transparency Act (CTA) Affecting the Beneficial Ownership Information (BOI) Reporting Requirement

Yesterday, a judge in the U.S. District Court for the Eastern District of Texas issued a preliminary injunction, effectively blocking the U.S. Department of Treasury from enforcing the CTA’s beneficial ownership information reporting requirements. The BOI reporting requirement that became effective earlier this year, requires entities organized both in the U.S. and out, to disclose their beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network.  For entities created or registered before January 1, 2024, the deadline to complete the BOI reporting requirement is set for January 1, 2025.

Due to the preliminary injunction, this deadline no longer exists. However, it is widely believed that the Government will appeal this ruling.

Keep in mind that there are potentially criminal and civil penalties for failure to report an entity’s BOI. Those penalties include both prison time and monetary penalties. If the BOI filing requirement is upheld, it is possible that the Treasury will enforce penalties for failure to make filings as initially required under the law. BMSS recommends that clients consult with their legal counsel on BOI reporting requirements and related filing obligations.