In a significant development this past week, a federal judge in Texas has issued a nationwide preliminary injunction against the enforcement of Beneficial Ownership Information (BOI) filing requirements under the Corporate Transparency Act (CTA). This ruling halts the January 1, 2025, deadline for businesses to report ownership data to the Financial Crimes Enforcement Network (FinCEN).
The plaintiffs argued that the CTA violated constitutional principles, including free speech and privacy rights. As a result, businesses would not need to comply unless the ruling is overturned. Not many news reports have been issued by the federal government at this time announcing the hold as the U.S. Treasury Department plans to appeal this ruling.
This decision impacts over 32 million entities initially covered by the rule. According to the American Bankers Association Banking Journal, only a quarter of those businesses had registered by mid-November.
The original purpose of the CTA was to prevent money laundering and other financial crimes. However, initiating the CTA has experienced challenges.
Stay in the know. Businesses should continue to monitor further legal developments as appeals may follow to ensure they stay compliant with the federal government.
Aventi Enterprises is a strategic consulting firm supporting the growth of small businesses. Visit www.aventienterprises.com for more news and insights.
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