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Court Decision Suspends BOI Reporting for Some, Not All

BOI

A recent ruling in a federal district court has changed the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements for some, but not all. It’s important to understand if you are part of the group that no longer needs to file, or if the filing requirements for your business are still valid.

Who Does the Recent Beneficial Ownership Information Reporting Court Case Impact?

On March 1, 2024, a federal district court in the Northern District of Alabama ruled in National Small Business United v. Yellen that the CTA Act is unconstitutional. The decision states the Department of the Treasury and FinCEN cannot require any of the plaintiffs to comply with the CTA, and along with it, related BOI requirements.

Who are the plaintiffs? In addition to Isaac Winkles and any reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association and any of its members as of March 1, 2024, will not have to report BOI at this time.

What Does this Court Case Mean for the Future of BOI Reporting?

The long-term impact of this ruling on BOI reporting is yet to be determined. For now, the ruling only applies:

  • While the order remains in effect, and 
  • To the named plaintiff as well as the 65,000-plus other members of the National Small Business Association as of March 1, 2024.

As the situation unfolds, if your entity does not fall into one of the 23 exemption categories from the CTA or it is not one of the parties affected in this district court case, you may still have a federal BOI reporting requirement. As a reminder, below are the federal reporting deadlines: 

DATE COMPANY WAS/IS ESTABLISHED
INITIAL BOI REPORT SUBMISSION DEADLINE
Prior to Jan. 1, 2024
Jan. 1, 2025
On or after January 1, 2024, and before January 1, 2025
90 days from formation 
2025 or later
30 days from formation

Additionally, the federal court case does not appear to impact New York’s state BOI reporting requirements, due on the following dates: 

DATE OF LLC FORMATION/AUTHORIZATION TO DO BUSINESS IN NY
NY BOI/NY STATEMENT OF EXEMPTION DUE DATES
On or before December 21, 2024
January 1, 2025
After December 21, 2024
At the time of filing articles of organization or applying for authority to do business in NY

We recommend consulting with your legal counsel to determine your entity’s filing requirements under the CTA and to fully understand the impact this court decision has on your business.

Article by Cohen &Co