Alert: Federal Court Grants Delay to FinCEN Beneficial Ownership Information Reporting

The Financial Crimes Enforcement Center (FinCEN) created the Corporate Transparency Act (“CTA”) which required many companies to report information about the individuals who ultimately own or control them. The deadline for this report, called the Beneficial Ownership Information Report (“BOIR”), had been due for all corporations by December 31, 2024.

In an important recent update, a Federal district court found that the CTA is likely unconstitutional, and issued an order prohibiting the enforcement of the CTA and the beneficial ownership information (BOI) reporting rule in the CTA’s accompanying regulations.

The injunction, which according to the court should apply nationally, was issued in Texas Top Cop Shop, Inc. vs. Garland, No. 4:24-CV-478 (E.D. Texas 12/3/24).

Under the injunction, the CTA and the BOI reporting rule cannot be enforced, and reporting companies need not comply with the CTA’s Jan. 1, 2025, BOI reporting deadline pending a further order of the court.

FinCEN is reviewing the order and has issued an appeal. Best practices would dictate that companies continue to gather the required information and be prepared to file the BOIR filings if the injunction is lifted.