A recent federal court order issued an injunction that has halted the requirement for companies to file beneficial ownership information with FinCEN, the Financial Crimes Enforcement Network. The order is presently being appealed.
The litigation, Texas Top Cop Shop v Garland, is ongoing, but the immediate result of the court’s rulings is that reporting companies are not presently required to file beneficial ownership information with FinCEN.
This means they are not subject to liability for failing to do so while the court order remains in force. However, reporting companies may voluntarily submit beneficial ownership information reports.
More information is available on the FinCEN website, at https://www.fincen.gov/boi.
As we pointed out earlier, FinCEN, part of the U.S. Department of the Treasury, had begun implementing the Beneficial Ownership Information Reporting Rule established under the 2021 Corporate Transparency Act.
The stated purpose of the rule was to assist law enforcement in finding bad actors who use shell companies and opaque ownership structures to launder money or conceal illicit funds. It would have required millions of companies (corporations, LLCs, and any other entities created by state filings) to report their “beneficial ownership” to FinCEN, such as an individual’s date of birth and driver’s license number.
We will continue to track the status of this litigation and other BOI developments and will update you on significant developments.
By Robert Weiss