Entities Get A Reprieve from Beneficial Ownership Information Filings
Danielle Davenport
Davenport Group | RE Portfolio Management Entitlement, Development, and Investment. Offering Land Acquisition & Use Consulting, Disposition. Site(s) Selection to Build Out to Asset Management.
The requirement to file Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA) has been temporarily blocked due to recent court rulings. This pause provides entities with a reprieve as legal challenges unfold.
The CTA mandates that certain entities file BOI reports with the Financial Crimes Enforcement Network (FinCEN). However, the National Small Business Association (NSBA) and the National Federation of Independent Business (NFIB) have challenged the law, arguing that it is unconstitutional. These organizations assert that the CTA violates the First and Fourth Amendments while placing an undue burden on small businesses.
Court Rulings
What’s Next?
The situation remains fluid. The Fifth Circuit Court of Appeals or the Supreme Court may lift the injunction, which could reinstate the January 1, 2025, deadline for BOI filings. Additionally, FinCEN may decide to adjust the reporting timeline to accommodate businesses.
What Does This Mean for Entities?
Currently, entities such as LLCs, corporations, and other organizations that file documents with a secretary of state (or equivalent office) are not required to submit BOI reports while the court order is in effect. There is no liability for failing to file during this period. However, reporting entities can still choose to voluntarily submit their BOI reports to FinCEN.
For updates and further information, visit FinCEN’s official page: https://www.fincen.gov/boi
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