Beneficial Ownership Reporting (BOIR) Back in Force Following Appeals Court Decision

In my last update, I shared how a federal court in Texas issued a nationwide injunction temporarily halting the enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information Report (BOIR) requirements. Well, here’s the latest development: the U.S. Court of Appeals for the Fifth Circuit has now lifted that injunction, effectively reinstating the reporting requirements for businesses.

What Happened?

On December 23, 2024, the Fifth Circuit granted a temporary stay on the injunction issued by the lower court, meaning that BOIR requirements under the CTA are once again in effect. The appeals court found that the government had a strong case for the constitutionality of the CTA, emphasizing its role in combating financial crimes and protecting national security.

This decision accelerates compliance timelines for affected businesses.

Key FinCEN Reporting Deadlines

With the reporting requirements back in force, here’s what you need to know:

1. Companies created or registered before January 1, 2024: Must submit their initial BOIR by January 13, 2025.
2. Companies registered between September 4, 2024, and December 23, 2024: If their initial reporting deadline fell between December 3 and December 23, 2024, they must also file by January 13, 2025.
3. Companies registered between December 3, 2024, and December 23, 2024: Must submit their report within 21 days of their original reporting deadline.
4. Disaster Relief Extensions: Businesses eligible for disaster relief may have extended deadlines beyond January 13, 2025.
5. New companies registered after January 1, 2025: Must file their initial BOIR within 30 days of registration.

Implications for Businesses

This decision means businesses must comply with the reporting requirements unless further legal developments provide relief. The court’s analysis underscored the modest compliance burden: for most companies, FinCEN estimates the process will take about 90 minutes and cost $85.

However, with the holiday season in full swing, the two-week post-holiday window leaves businesses with limited time to act before deadlines approach. Small and medium-sized enterprises, in particular, should prioritize preparations to avoid penalties.

Final Thoughts

The legal battle over the CTA is far from over, but for now, businesses should focus on meeting the reinstated BOIR deadlines. The Fifth Circuit’s ruling highlights the importance of regulatory compliance in safeguarding the financial system, even as debates over state versus federal authority continue.

I’ll keep you updated on any further developments as this case progresses. In the meantime, make sure your organization is ready to comply.

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