On December 3, 2024, a federal court in Texas temporarily paused enforcement of the Corporate Transparency Act (CTA). This means that businesses no longer need to file Beneficial Ownership Information (BOI) Reports by the original January 1, 2025, deadline—at least for now.
What Happened?
The court issued this nationwide injunction after deciding that the CTA and its related regulations are “likely unconstitutional.” While the law’s goals of improving law enforcement and national security were acknowledged, the court determined that compliance costs and privacy concerns outweighed the benefits at this stage.
This ruling is temporary. The government has 60 days to appeal, and enforcement could resume if the decision is overturned or paused. It’s also worth noting that with the upcoming change in presidential administrations, the new administration may choose not to appeal the decision.
What Does This Mean for You?
At this time, your business is not required to file a BOI Report. If your business qualifies as an exempt entity under the CTA, no further action is necessary. However, if you are not an exempt entity, it is important to gather all the information needed for the report and send it to your Kleinbard attorney. Taking this “prepare but wait” approach ensures you are ready to act if required while avoiding unnecessary actions during the injunction.
Will There Be Penalties for Filing Late?
By gathering your information now and sharing it with your Kleinbard attorney, you avoid the risk of penalties if the deadline is reinstated. This approach ensures your report is ready to go as soon as any updates are announced.
When Will We Know More?
The legal landscape around the CTA is evolving. Kleinbard is closely monitoring developments, including potential appeals or decisions by the Treasury Department. We will provide timely updates to ensure you are informed about any changes as soon as they occur.
Next Steps:
- Exempt Entities:
- If your business qualifies as exempt, no action is needed.
- Non-Exempt Entities:
- Collect the necessary information for your BOI Report via the CTA Questionnaire.
- Share this information with your Kleinbard attorney to ensure they have it on hand and respond to invitations to the FinCEN Report Company Portal (our CTA filing software).
- Stay informed about updates to the legal landscape.
If you have any questions or need assistance, please reach out to your Kleinbard attorney. We are here to support you as this situation develops.
