Client Alert
As noted in our previous Client Alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that temporarily blocks enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules.
Update as of December 13, 2024
On December 12, 2024, the government filed a motion to stay the preliminary injunction pending its appeal. The plaintiffs were ordered to respond to the government’s motion to stay the preliminary injunction by December 16, 2024. It is unclear how quickly the district court will rule on that motion.
In response to the injunction, FinCEN has confirmed that reporting companies are not currently required to file BOI with FinCEN and are not subject to liability if they fail to do so while the injunction remains in effect. FinCEN also stated that reporting companies may continue to voluntarily submit BOI notwithstanding the injunction. The government’s motion to stay the preliminary injunction appears to demonstrate the government’s resolve to preserve the January 1, 2025, reporting deadline. Companies potentially subject to BOI reporting should keep this in mind while they continue their preparation to comply with the CTA’s reporting requirements.
We are closely monitoring developments in the case and will continue to provide updates on any changes to the legal landscape.
