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Court Reverses Course: Beneficial Ownership Information Reporting Halted, Again
In rapid fashion, the Fifth U.S. Circuit Court of Appeals has reinstated a nationwide injunction that had been issued earlier this month by a federal judge in Texas that concluded the Corporate Transparency Act (CTA) was likely to be found unconstitutional. The Financial Crimes Enforcement Network (FinCEN), that is charged with overseeing the CTA reporting requirements, has yet to put out a response to this latest halt of beneficial ownership information (BOI) reporting requirements.
As discussed in a prior alert, on December 23, 2024, a motions panel of the Fifth Circuit Court granted the Federal government’s emergency motion for a stay of the nationwide injunction pending appeal, resulting in reporting companies being obligated to file their BOI reports by their applicable deadline as well as FinCEN issuing extensions for the deadlines. With this latest ruling, submitting BOI reports again becomes optional, for the time being, as this matter continues to play out in the court system.
The appeal has been expedited to the Fifth Circuit Court’s next available oral argument panel. We will continue to provide updates.
Attorney Gordon W. Prince is a member of the Business Law Department at Gawthrop Greenwood, PC, where he focuses his practice on business and corporate law, contracts, financing and secured transactions. He was named to Best Lawyers®: Ones to Watch, Super Lawyers Rising Star, as well as Top Lawyers in Main Line Today and the Daily Local News. For more information, contact Gordon at gprince@gawthrop.com or 610-696-8225.
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