We recently reported that on December 23rd the US Court of Appeals for the Fifth Circuit stayed the preliminary injunction of the Corporate Transparency Act (“CTA”), thereby requiring the reporting to FinCEN of Beneficial Ownership Information by “reporting companies” – most small business entities and many non-profit organizations. FinCEN then issued an Alert establishing new deadlines for online submittal of the so-called “BOI reports.”
However, on December 26th, the merits panel of the Fifth Circuit reversed the Court’s days-old decision and reinstated the preliminary injunction originally ordered by the US District Court for the Eastern District of Texas on December 3rd, referencing the Court’s aim “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments….” The Fifth Circuit reported that the appeal remains expedited.
On December 27th, FinCEN reported on its website an Alert confirming the reinstated injunction, the voluntary nature of BOI reporting for now, and its belief that the CTA is constitutional. And who knows, Congress may have second thoughts about the CTA and BOI reporting in the months ahead.
For the time-being, compliance with the CTA “hot potato” is enjoined and BOI reporting is only voluntary. Stay tuned as the status of the CTA is getting wide publicity given its broad impact and compliance requirements. Visit FinCEN’s website: https://fincen.gov/boi for their latest BOI Alerts and updates, or contact your attorney at Devine Millimet.
