On December 3, 2024, a federal district court in Texas issued a nationwide preliminary injunction, pausing the enforcement of Beneficial Owner Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). At this time the impact of the court’s ruling is to likely delay the requirement that all Reporting Companies file their BOI with FinCEN by January 1, 2025.

It’s important to note that this injunction is not a final decision in the Texas court case, and that the ruling is just a single lower court’s opinion about the possibility that the final decision may be that the federal law is eventually invalidated. The preliminary injunction means the actual case is still pending, and a final decision will be rendered only after the case is fully reviewed.

If this Texas court does issue a final ruling to invalidate the CTA, there are likely to be appeals filed in higher courts, with the possible results that the injunction is either affirmed or overturned, or restricted in some way.

What should business owners do now?

Until there is a final decision regarding the validity of the CTA, and there are no further appeals available, business owners should assume that the reporting requirements will be reinstituted in the future with a later filing deadline.

If you have not already filed your BOI report, please continue to prepare to file it by identifying your company’s Beneficial Owners and organizing the required ownership data. 

For your Reporting Company, if it does not fit into an exception, the information required is:

• Full legal name of the reporting company (and any trade names or DBAs);
• Tax identification number;
• Jurisdiction of formation; and
• Current U.S. address.

For each Beneficial Owner (as any individual who either (i) directly or indirectly exercises substantial control over an entity, or (ii) owns or controls at least 25% of the ownership interest in the company) and each Company Applicant (the person who forms the business entity or directs the filing), the required information is:

• Name, date of birth, and street address;
• Government-issued identifying document, such as a passport or driver’s license, and an image of that document.

As there are developments in this case and in any other cases regarding the CTA, I will keep you informed. You can also read prior articles on my website. As always, please call with questions.

NOTE: THIS ARTICLE IS FOR GENERAL INFORMATIONAL PURPOSES. IT DOES NOT CONSTITUTE LEGAL ADVICE, NOR DOES IT CREATE AN ATTORNEY-CLIENT RELATIONSHIP. EACH SITUATION IS DIFFERENT. YOU SHOULD CONSULT WITH AN ATTORNEY TO DETERMINE YOUR LEGAL RIGHTS, REMEDIES, AND DUTIES.

By Wendy M. Anderson, Esq.
Law Office of Wendy Anderson, PLLC

480-825-4509

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