Remember how we were telling you to make sure you filed your BOI to avoid things like fines and other possible penalties? Well….
Yesterday, a district court judge in the Eastern District of Texas torpedoed that requirement with a preliminary injunction. It blocks enforcement of the Corporate Transparency Act (CTA) and – you guessed it – the beneficial ownership (BOI) reporting rule. This injunction also delays the January 1, 2025 compliance deadline for “reporting companies.”
What does that mean for you?
Before the Injuction
About 33 million small businesses nationwide would have been required to submit their beneficial ownership information to FinCEN by January 1.
After the Injunction
If you are one of those 33 million small businesses and you haven’t yet submitted an initial report to FinCEN, you no longer need to do so.
If you already submitted reports, you’re not obligated to update or correct your information.
Bottom Line
No enforcement actions can be taken against businesses for noncompliance while the order remains in effect.
Those last six words are key, though: “while the order remains in effect.” Because this is a preliminary ruling and could be reversed. The reason the judge issued the injunction was to maintain the status quo while the court evaluates the case further.
In the written opinion, the judge determined the CTA to be unconstitutional and found that the plaintiffs, including the 300,000 members of the National Federation of Independent Business, have a strong likelihood of success in their challenge.
This ruling does not impact the Eleventh Circuit’s ongoing review of a separate case that blocked enforcement of the reporting rule for the 65,000 members of National Small Business United.
What all of this means is that big potential changes are happening, and you need to be paying close attention to make sure you remain in compliance and prevent wasting time and money.
Stay tuned. We know we will.
