INJUNCTION TEMPORARILY PREVENTS ENVORCEMENT OF “BOI” FILING

Client Alert:

Dear Clients and Friends:

As you may know, the Corporate Transparency Act requires all existing entities (Corporations, Limited Liability Companies, and Partnerships) to file Beneficial Interest Ownership Reports prior to January 1, 2025 (extended by 6 months for certain individuals affected by Hurricane Milton).  On Tuesday, a Federal District Court in Texas declared the Corporate Transparency Act to be likely unconstitutional, preliminarily enjoined the Treasury Department from enforcing the Act, and stayed the January 1, 2025, compliance deadline, pending further orders from the Court.   See Order.  While most, if not all, commentators believe this injunction is applicable nationwide to all small businesses and that reporting companies do not have an obligation to comply with CTA at this time, the Treasury has not yet issued a response to this order, and we expect that this decision will be appealed by the Biden Administration.

For those of you that have engaged our firm to complete the BOI filings for you, we will be reaching out separately to confirm whether you wish to proceed with the reporting, given the uncertainty of the situation.  Our assumption is that those who are in the final stages of the process will want to proceed, while those who have not yet started will want to wait until further developments.

We will keep monitoring the developments and keep you informed.  If this preliminary injunction is lifted, it will be very easy to resume our efforts, and we expect that there will be reasonable notice before deadlines would apply for those who acted in good faith up to this point.

Best regards,

Joe Kempe