The enforceability of the Beneficial Ownership Information (BOI) reporting mandate in the Corporate Transparency Act (CTA) has been temporarily suspended as of December 3, 2024, following court intervention enjoining enforcement of this law, which requires business owners to report ownership interests to the Financial Crimes Enforcement Network (FinCEN).
Please Read the Article On Point, by the National Law Review: BREAKING: Federal Court Enjoins Government from Enforcing Corporate Transparency Act
This is an update to our initial article on point: Understanding the BOI Reporting Deadline and Its Importance.
Behind the scenes, the legislative intention of the law and reporting requirement was ostensibly to guard against small business owners funding terror organizations and bad actors in different criminal enterprises. Those security interests, however, may be balanced against privacy rights and well-settled law in commerce, as well as individual and constitutional rights.
The lawsuit filed in May 2024 in the U.S. District Court for the Eastern District of Texas resulted in a temporary injunction suspending the authority to enforce BOI reporting rules. The injunction will remain in effect until the Court can conduct a full trial on the merits of the arguments before it and further determine, with some finality, what business owners must do to comply with business laws like the CTA.
In the meantime, knowing anything is possible, it makes sense for responsible business owners to take appropriate action to follow up on what happens with this matter and keep up with changes in laws. Here at Michael V. Favia & Associates, we will also keep up with regulatory updates and share them as they become available.
