UPDATE (12/27/2024):
The Fifth Circuit has vacated its decision of Monday, Dec. 23, which restores the nationwide preliminary injunction against enforcement of the beneficial ownership information reporting rules. The merits panel of the Fifth Circuit stated in its order Thursday evening, December 26, that its decision was necessary “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” The court also expedited the appeal to the “next available oral argument panel,” which it appears could be the week of January 6, 2025, based upon the court’s published schedule.
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Late today (12/23/2024), the U.S. Court of Appeals for the Fifth Circuit lifted the preliminary injunction imposed by a federal district court in Texas against the government’s enforcement of the BOI reporting rules. This means that as of now (early evening on 12/23/24), the reports must be filed by covered entities by Jan. 1, 2025. The appellate court cited the government’s authority to regulate commerce under the Commerce Clause to determine that the government was likely to prevail on the merits.
But that’s the point. The reporting requirement is not triggered on a business engaging in commerce. It’s triggered upon registering with a state office regardless of whether any commerce has been conducted.
Nevertheless, Jan. 1 is not the key date to remember — it’s now January 13, 2025. Here’s what the FINCEN has posted on its website:
“In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:
- Reporting companies that were created or registered prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created or registered in the United States on or after September 4, 2024, that had a filing deadline between December 3, 2024, and December 23, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
- Reporting companies that are created or registered in the United States on or after January 1, 2025, have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.”
The movement to Jan. 13, 2025, will allow the new Congress to address the matter (which it should have taken care of in the year-end legislation). Of course, if an emergency writ is filed with the Supreme Court, the Supreme Court could address the matter before that. I suspect this issue is far from over.
Stay tuned…
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