Corporate Transparency Act Reporting Requirements Temporarily Halted
December 4, 2024 by
Background:
The Corporate Transparency Act (the “Act”) went into effect on January 1, 2024, and was enacted by Congress in an effort to (1) increase transparency into the beneficial ownership of domestic and certain foreign businesses, and (2) help prevent money laundering, fraud, hiding ill-gotten gains in shell companies, and other similar criminal activities. The Act requires all companies that don’t fall into an exemption (each a “Reporting Company”) to report beneficial ownership of the company to the Financial Crimes Enforcement Network (“FinCen”) through the filing of a Beneficial Ownership Information Report (“BOIR”).
Update:
On December 3, 2024, Federal District Judge Amos L. Mazzant, III of the Eastern District of Texas issued a Memorandum Opinion and Order in Texas Top Cop Shop, Inc., Et Al, v. Garland E.D. Tex., No. 4:24-cv-00478 (a copy of which can be found here) which concluded the Act is likely unconstitutional and the BOIR requirement is also likely unconstitutional, in each case as being outside of Congress’s power to enact and enforce. As a result, the Court granted a Motion for Preliminary Injunction which temporarily prevents enforcement of the Act and BOIR requirements, including the Act’s looming reporting deadline of January 1, 2025.
What Does This Mean For You?
While the Act and BOIR requirements are temporarily put on hold, Reporting Companies have a choice if they have not already filed their BOIR:
- File: Reporting Companies can continue to submit their BOIR in compliance with the Act by either going to https://boiefiling.fincen.gov/fileboir or reaching out to us for help; OR
- Wait: Reporting Companies can choose not to file their BOIR and wait for further updates and developments from this (and other) cases which challenge the Act and the BOIR requirements.
What’s Next?
The situation is evolving, and further updates from the courts could affect these requirements. We’re here to help you navigate this process and keep you informed about any changes.
If you have questions about the Corporate Transparency Act or need assistance with your BOIR, don’t hesitate to reach out!
Joshua Mahaffey
jmahaffey@brownfoxlaw.comJoshua Mahaffey brings a wealth of real-world, corporate experience to his client engagements. Prior to practicing law Mr. Mahaffey spent over twenty years in the transportation and logistics industry, with an emphasis on risk management. He often engaged and collaborated…Read More
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Adam Fox
adam@brownfoxlaw.comAdam Fox co-founded Brown Fox and has emerged as a go-to confidant and wise counsel for business leadership, ranging from billion dollar companies to innovative start-ups.
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