BlogLine

BOI reporting update: A continually shifting landscape

12/18/24

By: William R. Covino and Nancy M. Reimer

Those seeking clarity over the enforceability of the Corporate Transparency Act (the “CTA”) and their obligation to file beneficial ownership reports with the Financial Crimes Enforcement Network (“FinCEN”) now face another layer of uncertainty. 

As previously reported in our client alert dated December 9th, the United States District Court for the Eastern District of Texas issued a nationwide injunction over the enforcement of the CTA in advance of its upcoming mandatory filing deadline of January 1, 2025. In turn, FinCEN issued an alert stating it would comply with this order so long as it remains in effect. 

Now, while practitioners and “reporting companies” await an order from the United States Court of Appeals for the Fifth Circuit as to whether the nationwide injunction over the CTA will be stayed, the United States House of Representatives (the “House”) passed a bill to extend the reporting deadline for beneficial ownership reports. This bill, H.R. 5119, is known as the Protect Small Business and Prevent Illicit Financial Activity Act. 

For now, the bill changes nothing. It is not the law. It will need to be presented to and approved by the United States Senate. There is no clear indication on when the bill will be presented or whether it will be passed without further changes, or at all. If the bill becomes law, it would: (i) extend the deadline for reporting companies filed before 2024 from January 1, 2025, to January 1, 2026; (ii) require reporting companies formed during or after 2024 to file beneficial ownership reports within 90 days; and (iii) require supplemental reports no later than 90 days from a change with respect to information provided in a prior report.   

Given these developments, reporting companies who have not already filed beneficial ownership reports should remain diligent in compiling necessary information. Companies should not rely on the Fifth Circuit upholding the pending injunction or the proposed extension becoming the law. We will continue to follow and report developments concerning the CTA to you.  

For more information on this topic, please contact Nancy Reimer at nancy.reimer@fmglaw.com; Will Covino at william.covino@fmglaw.com; or your local FMG relationship partner.