CTA and Beneficial Ownership Reporting While Under Preliminary Injunction

Earlier this month we reported on the recent nationwide preliminary injunction against the Corporate Transparency Act and enforcement of the Beneficial Ownership Interest Report (BOIR) requirement. Below we provide you with additional guidance.

While the Texas District Court’s nationwide preliminary injunction provides a reprieve from the January 1, 2025 filing deadline, it may not mean you are off the hook entirely. In reality, this development in the law creates more questions than answers.

What is a business owner to do? Consider these three options:

1. Do nothing. Ignore the whole thing. WE DO NOT RECOMMEND!
2. File your BOIR now and move on to focus on operating your business.
3. Wait and see what happens next to find out for sure what, and by when, you could be required to file your BOIR. Keep in mind that there could be a very short time period in which to come into compliance with this federal law.

We anticipate there will be additional court proceedings. Most likely, the government will appeal this injunction and move for a stay of it. Here is what could happen next:

1. The stay is granted, the preliminary injunction is lifted and reporting requirements immediately return. There may or may not be a grace period.
2. The stay is denied and the preliminary injunction continues, again though, temporarily until the issue can be fully and finally resolved in the courts.
3. The scope of the preliminary injunction is narrowed, perhaps making it apply to a smaller group of people, such as only the named plaintiffs.

In short, while you do have a reprieve from the January 1, 2025 filing deadline, you also have uncertainty about what may or may not be required next. Taking the above into consideration may help you determine the best path forward for you and your business.

Should you wish to file your BOIR now and would like our assistance with that filing or other business and corporate related matters, please contact your attorney or Kim, Lahey & Killough attorney Emily Bohan or Tony Nolte.

Please note that Kim, Lahey & Killough will not file a BOI report for you or arrange to have a BOI report filed for you unless you reach out to us directly to request assistance.

For more information, please visit https://kimandlahey.com/practice-areas/corporate-transparency-act/