A new Supreme Court ruling will not force small businesses to file Business Ownership Information (BOI) with the government.
However, the Supreme Court’s decision to reverse a nationwide injunction by a federal judge in Texas could open the door to business filings this year.
Under the Corporate Transparency Act (CTA), passed into law in 2021, over 30 million small businesses were required to file information about their ownership by Jan. 1, 2025.
In Texas Top Cop Shop, Inc. v. McHenry, a Texas judge halted compliance nationwide. The Supreme Court justices granted an emergency plea made by the Justice Department to allow enforcement of the CTA.
The Financial Crimes Enforcement Network (FinCEN) said Thursday that a separate nationwide order, issued by a different Texas federal court judge, remained in place.
“As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop,” FinCEN said. “Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
The CTA was created to help FinCEN and the Treasury Department fight money laundering by identifying illicit shell companies.
National Small Business Association President and CEO Todd McCracken urged FinCEN to give businesses ample time to comply with the requirement.
“This decision creates even more uncertainty for the millions of small businesses we represent,” McCracken said. “I cannot stress enough what a major problem this back-and-forth is and the massive uncertainty it creates for the millions of small businesses across this country.”
