Important Beneficial Ownership Information Update: Reporting Voluntary

The United States District Court for the Eastern District of Texas recently ruled on the case of Texas Top Cop Shop, Inc. v. Garland placing an injunction, that applies nationwide, on the enforcement of the Corporate Transparency Act (CTA). This means that the federal government will be prohibited from enforcing the CTA and, for the time being, BOI reporting is voluntary.

Prior to this ruling, many reporting companies have already analyzed entity structure and begun to file their Beneficial Ownership Information (BOI) reports with FinCEN as required under the Corporate Transparency Act. In fact, more than 8 million reports have been filed with FinCEN. The rest of the estimated 32.6 million reporting companies that haven’t yet filed were likely in the process of complying with the January 1, 2025, deadline for entities in existence prior to January 1, 2024.

What should reporting companies do now?

If you have already filed your Beneficial Ownership Information Report(s):

• No further action is required.

• Continue to gather information that would require you to update your initial BOI report (i.e. change in beneficial owners, change in company/beneficial owner address or identification information, etc.) and be prepared to report these changes if the injunction is lifted.

If you haven’t yet filed your Beneficial Ownership Information Report(s):

• Currently the court’s ruling applies nationwide, but the CTA has not been eliminated. The federal government has already appealed this ruling.

• Continue to analyze your entities to determine the beneficial owners and gather all the required information to report. This will enable you to be ready to file and meet the deadline should the injunction be lifted in the future.

• If you have engaged an attorney or other service provider to assist you in filing, you should refer any questions on this ruling to them.

Your Farm Credit East team will continue to monitor the developments around the enforcement of the CTA as this case is appealed to the Fifth Circuit Court of Appeals and bring you relevant updates as they become available.