BOI Reporting Paused – What This Means for Your Business and How to Stay Prepared

The Latest Update on BOI Reporting

If you’ve been keeping up with the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements, there’s a major update you need to know. On December 3, 2024, a federal court issued a nationwide injunction, effectively halting enforcement of the CTA. The court found the law to be “likely unconstitutional,” which means that for now, BOI reporting is on pause.

This is big news for business owners across the country, especially those who were bracing for the January 1, 2025, compliance deadline. But before you breathe a full sigh of relief, here’s everything you need to know and how to stay prepared if the ruling changes.

What Is the Corporate Transparency Act (CTA)?

The CTA was enacted to fight financial crimes like money laundering by requiring certain companies to report information about their “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN).

• Who are Beneficial Owners? Individuals who directly or indirectly own or control at least 25% of a company, or exercise substantial control over it.
• Reporting Requirements: The law requires businesses to submit personal information about beneficial owners, including names, birthdates, and addresses.
• Penalties for Non-Compliance: Companies failing to file BOI reports could face steep fines and penalties, including criminal charges.

You can learn more about the CTA and BOI reporting requirements directly from FinCEN here.

What Does the Court Injunction Mean?

The recent federal court decision in the Eastern District of Texas found the CTA “likely unconstitutional.” This prompted a nationwide injunction, which temporarily stops FinCEN from enforcing BOI reporting requirements.

In plain terms:

• If your business was preparing to file BOI reports by January 1, 2025, you no longer need to comply at this time.
• However, this is a temporary pause, and the Department of Justice could appeal the ruling. If the decision is overturned, the reporting deadlines could quickly come back into play.

What Should Business Owners Do Now?

Even though the BOI reporting requirement is paused, staying ahead of the game is the best strategy. As we’ve seen before, legal rulings can change rapidly, and waiting until the last minute could leave your business scrambling.

Here’s what you can do to stay prepared:

1. Stay Informed
   Keep up-to-date with the latest developments in the CTA ruling. I’ll continue monitoring the situation and will share updates as they happen. You can also follow updates from FinCEN here and the Journal of Accountancy article here.
2. Get Organized
   If the reporting requirements are reinstated, businesses will still need to submit detailed information about their beneficial owners. Gathering this information now can save you time and stress later.To make this easier, I’ve created a BOI Information Organizer to help you gather and organize the necessary details.

   👉 Need a copy? Simply contact me here, and I’ll send it over to you.

3. Talk to Your Advisor
   If you’re unsure about how BOI reporting applies to your business, or whether you’ll need to comply in the future, now is a good time to schedule a consultation. I’m happy to walk you through what you’ll need to know. I have also created an organizer for this reporting, request access in the portal.

Why This Matters for Small Businesses

The CTA was designed to target shell companies used for illegal activities, but its reporting requirements impact small businesses the most. Many business owners were unaware of these new obligations until recently, and the reporting process can feel overwhelming.

This injunction provides a temporary break, but it’s important to use this time wisely. Staying prepared now will ensure you’re ready to act quickly if the reporting deadlines return.

Next Steps: Let Me Help You Stay Prepared

While the future of BOI reporting remains uncertain, staying organized and informed will help protect your business.

Here’s what I can offer:

• BOI Information Organizer: A simple tool to gather and document the necessary details about beneficial owners.
• Consultations: Guidance tailored to your business to ensure you’re ready for any changes in the law.

📧 Email me at mcfadden@mcfaddenaccounting.com or call me at 240.929.1040 to request your organizer or schedule a consultation.

Let’s navigate these changes together—so you can focus on running your business with confidence.