On March 1, 2024. U.S. District Court for the Northern District of Alabama ruled that FinCEN’s Beneficial Ownership Information (BOI) reporting requirement enacted as part of Corporate Transparency Act (Public Law 116-283) constituted Congressional overreach and, therefore, is unconstitutional. The court ruled that it cannot be enforced against the plaintiffs who brought the case. The plaintiffs are Isaac Wilkes, a small business owner, and National Small Business United, a trade organization representing 65,000 members, including Isaac Wilkes. The case is National Small Business United v. Yellen (March 1, 2024) U.S. Dist. Ct., North. Dist. Of Ala., Case No. 5:22-cv-1448-LCB).
In a press release issued on March 4, 2024, FinCEN stated that in compliance with the court’s order, it will not enforce the beneficial ownership reporting requirements against the plaintiffs, indicating that all other reporting companies are still subject to the reporting mandate. This means that unless a business is a member of the National Small Business United, it must still comply with the reporting mandate.
As we wrote in our previous post, reporting companies created or registered on or after Jan. 1, 2024, and before Jan. 1, 2025, will have 90 calendar days from the date they receive actual or public notice that their company’s creation or registration is effective to file their initial BOI reports. Reporting companies created or registered on or after Jan. 1, 2025, will have 30 calendar days from the date they receive actual or public notice that the company’s creation or registration is effective to file their initial BOI reports. Existing companies, that is, reporting companies that were created or registered before Jan. 1, 2024, have a full year, until Jan. 1, 2025, to file their initial BOI report.