Alert – Corporate Transparency Act – Nationwide Preliminary Injunction Reinstated

The date of this alert is December 28, 2024. I think it makes sense to start dating these updates regarding the Corporate Transparency Act (the “Act”) since reporting obligations are changing so frequently. The long and short of it is that a federal appeals court has reinstated the nationwide preliminary injunction. This means that companies are, again, not currently required to submit the Beneficial Ownership Interest (“BOI”) report under the Act. So, how did we get to where we are:

  • December 3, 2024 – A federal district court in Texas issued a nationwide preliminary injunction.
  • December 23, 2024 – An emergency motions panel of a federal appeals court in Texas entered a stay of the district court’s nationwide preliminary injunction – which meant that companies were required to submit the BOI report.
  • December 26, 2024 – The merits panel of the same federal appeals court in Texas reviewed the ruling of the emergency motions panel and reversed the emergency motions panel’s decision which reinstated the nationwide preliminary injunction. The reason for the reinstatement was to maintain the status quo during the appeal and not a ruling on the merits of the case.

In legal terms, I believe this is referred to as a dumpster fire. So, as of December 28, 2024, no companies in the USA are required to submit the BOI report with FinCen. However, companies still have the ability to voluntarily submit the BOI report.

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Please remember that the underlying court ruling is only a preliminary injunction. So, the court’s ruling is not yet final and, additionally, an appellate court is reviewing this matter. The determination if the Act is or is not constitutional is far from being over. This issue could end up before the United States Supreme Court since some federal courts have found the Act constitutional and other federal courts have found the Act unconstitutional. Buckle up.

I have been asked by clients if they should just go ahead and submit the BOI report pending the final resolution of this matter. I have counseled clients that since you are not currently required to submit the BOI report, I would hold off and wait to submit the BOI report when/if required. However, if you just want to get your BOI report submitted just to be done with it, there is nothing wrong with submitting the BOI report. BOI reports are still being accepted.

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2024.