Breaking news for small business owners! As of December 3, 2024, a Federal Court in Texas ruled against the enforceability of the Beneficial Ownership Information (BOI) reporting that had taken effect in 2024. As a result, reporting requirements have been temporarily suspended nationwide.

The primary concern from the plaintiffs in the Texas case was whether the Corporate Transparency Act (CTA) is an unconstitutional Congressional overreach and infringes upon the privacy rights of business owners. The issues being raised would potentially involve violations of the 1st and 4th amendments of the Constitution. The Federal Court issued a preliminary injunction to stop the enforcement of the CTA that was scheduled to go into effect January 1, 2025 and was rife with steep financial and legal penalties.

The most important thing to note is that this suspension of BOI reporting requirements is only temporary as the ruling states that the Court “has determined that the CTA and Reporting Rule are likely unconstitutional for purposes of a preliminary injunction.” The need to report may change at any point if the injunction is ultimately overturned. Business owners should be fully prepared to comply with reporting deadlines in a timely fashion and have their necessary ownership information on file as a precaution.

Due to ambiguity as it relates to providing professional services related to BOI reporting and it being interpreted by some as a potential unauthorized practice of law, including but not limited to state lawmakers and insurance carriers, AHP cannot assist clients with this filing nor advise clients on this topic. We are, however, providing this information as a public service announcement and encourage you to consider contacting legal counsel for assistance.