Corporate Transparency Act and FinCEN BOI Reporting on Hold Pending Judicial Review
As of January 9, 2025
On December 3, 2024, the United States District Court of the Eastern District of Texas issued an order for a nationwide preliminary injunction halting the implementation of the Corporate Transparency Act and the requirement for businesses to file a Beneficial Ownership Information report with the US Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Dept. of Treasury. The Corporate Transparency Act (the Act) was enacted as part of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 which was signed by President Donald J. Trump and became Public Law 116-283 on January 1, 2021.
The Act was implemented as part an effort to expand the authority of the U.S. Government to combat money laundering and other financial crimes. Several other pieces of legislation, including the Anti-money Laundering Act of 2020, the Combating Russian Money Laundering Act, and the Kleptocracy Asset Recovery Rewards Act were also passed as part of the NDAA with similar intent. The law requires that small businesses and LLCs disclose the same types of information regarding their ownership as corporations, banks, credit union, broker-dealers, utilities, and insurance companies. Nearly all types of small businesses are covered as reporting companies under the act, but there are several exemptions available. Details on these exemptions can be found in the Small Entity Compliance Guide below.
Since the preliminary injunction order was issued on December 3rd, a panel of judges of U.S. Court of Appeals for the Fifth Circuit issued a stay on the injunction on December 23rd, which was subsequently vacated on December 26th by a different panel of judges from the Fifth Circuit. As it stands, the Corporate Transparency Act and the requirement to file a Beneficial Ownership Information Report with FinCEN are on hold pending review by the Supreme Court. FinCEN will continue to accept voluntary submissions via https://fincen.gov/boi. Please note that this is the only website that you should use to submit a BOI report. There are several fraudulent websites attempting to collect information.
Small Entity Compliance Guide here.
Frequently Asked Questions is available here.
Stay up to date on the latest status of the Corporate Transparency Act here.
