A federal court has temporarily halted enforcement of a rule requiring small businesses to report beneficial ownership information to the Treasury Department.
Small businesses had been required to report 'beneficial ownership information' to the Treasury Department by January 13, 2025, or risk financial penalties. The 5th U.S. Circuit Court of Appeals issued an order late on December 26 that halted enforcement. It comes just days after a previous delay, from January 1. Businesses aren't required to file a BOI report and won't face liability while that order is in effect. The 5th U.S.
Circuit Court of Appeals issued an order late on December 26 that halted enforcement while the court considers the parties' weighty substantive arguments' on the constitutionality of the Corporate Transparency Act, which created the BOI reporting requirement, the order said. Sign up for NBC DFW's News Headlines newsletter. 'While it is not known how long the injunction will remain in effect, the case is calendared for oral argument on March 25, 2025, so we expect that the injunction will be effective at least through March,' Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an email. In the interim, businesses aren't required to file BOI reports to the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury. They could also face up to $10,000 in criminal fines and up to two years in prison. The BOI report data helps the federal government identify people who directly or indirectly own or control a company, to prevent criminals from hiding illicit activity conducted through shell companies or opaque ownership structures, Treasury said.. Many are exempt from the requirement, such as businesses with more than $5 million in gross sales and more than 20 full-time employees.The delay represents a bit of legal whiplash for small business owners. On December
SMALL BUSINESSES BENEFICIAL OWNERSHIP CORPORATE TRANSPARENCY ACT REGULATION COURT ORDER
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