January 2025 Updates On BOI Filing Requirements

If you are a small business owner struggling to keep track of what you may or may not need to file for your Beneficial Ownership Interest (BOI) and when that filing may be due, you are certainly not alone. The developments out of the Fifth Circuit Court of Appeals have gone back and forth rapidly (by litigation standards at least) leaving many lost.

A Brief Refresher on the Corporate Transparency Act

The Corporate Transparency Act (CTA), a significant piece of legislation passed in 2020, aims to combat money laundering, terrorist financing, and other illicit activities by requiring many businesses to report beneficial ownership information (BOI) to the federal government. Under the CTA, most small businesses, limited liability companies (LLCs), and other corporate entities are required to disclose key information about individuals who own or control 25% or more of the company. The reporting requirements are overseen by the Financial Crimes Enforcement Network (FinCEN), with businesses initially expected to begin filing their BOI reports by January 1, 2024.

However, ongoing litigation has thrown the implementation of the CTA into uncertainty, leaving many small business owners confused about their obligations. On December 3, 2024, a federal district court in Texas issued a nationwide injunction, halting enforcement of the CTA’s BOI filing requirements. This injunction was met with immediate pushback from the federal government, which argued that delaying implementation would undermine the law’s goal of increasing transparency and combating illicit financial activities. The Department of Justice appealed the decision to the Fifth Circuit, seeking to reinstate the reporting requirements as originally planned.

January 2025 Changes in BOI Filing Requirements

On December 23, 2024, the Fifth Circuit’s motion panel granted the Justice Department’s Motion to Stay enforcement of the injunction thereby temporarily reinstated the BOI reporting requirements while it reviewed the district court’s ruling. This decision created confusion among businesses that had stopped preparing for the January 2024 deadline due to the initial injunction. For a brief period, it appeared that businesses would need to comply with the original filing deadlines after all, with the only saving grace being that the reporting deadline for many was extended to January 13, 2025.

However, just days later on December 26, the Fifth Circuit’s merits panel issued a new order vacating the order from just three days prior, thereby once again suspending enforcement of the CTA’s reporting requirements, pending further review. This back-and-forth has left business owners in a precarious position, with no clear guidance on when BOI filings will ultimately be due.

As of now, the filing deadlines for BOI reports remain suspended. Businesses that were previously required to submit their BOI information by January 1, 2025, are not currently obligated to do so. However, this suspension is temporary and subject to change based on the Fifth Circuit’s final decision – with oral argument by the parties expected to take place in March.

Moreover, on December 31, 2024, the Solicitor General filed a petition with the United States Supreme Court requesting that the highest court reinstate the stay of enforcement against the nationwide injunction.

The Supreme Court, having broad discretion, is not obligated to address the Government’s petition prior to a final decision by the Fifth Circuit. However, it may do so if it chooses to. Thus, while it appears that the next development for filing requirement deadlines will not occur until March, which could change if the Supreme Court intervenes prior to then.

What Should You Do To Remain Compliant With BOI Reporting?
The uncertainty surrounding the CTA has left many small business owners wondering how to proceed. While the current suspension of deadlines provides temporary relief, it is not a guarantee that businesses will avoid the reporting requirements altogether. In fact, experts recommend preparing your BOI filings now to avoid being caught off guard when a final decision is issued.

In times of legal uncertainty, the best approach is to be proactive. At Inside Out Legal, we can assist businesses in navigating the complex legal climate surrounding the CTA. Our team can assist you in preparing your BOI filings and ensure that your business is ready to comply with federal regulations, regardless of the ongoing litigation.

By taking steps to prepare now, you can avoid last-minute scrambles and potential penalties if the reporting deadlines are reinstated. Do not wait for the courts to make their final decision—contact Inside Out Legal today to safeguard your business’s compliance and peace of mind.