The 5th U.S. Circuit Court of Appeals has temporarily halted the enforcement of a regulation requiring small businesses to report beneficial ownership information to the Treasury Department.
Small businesses were previously required to submit ' beneficial ownership information' to the Treasury Department by January 13, 2025, or face financial penalties. However, the 5th U.S. Circuit Court of Appeals issued an order on December 26, 2023, halting enforcement of this requirement.
The regulation, intended to prevent criminals from concealing illicit activities through shell companies, mandated that small businesses disclose the identities of individuals who directly or indirectly own or control them. The court's decision came after a previous delay from January 1, 2025. Businesses are not obligated to file a BOI report and will not face liability while this order is in effect. The case is scheduled for oral argument on March 25, 2025, and the injunction is expected to remain in effect until then. Businesses were facing potential civil penalties of up to $591 per day, as well as criminal fines up to $10,000 and imprisonment for up to two years for non-compliance. Many businesses are exempt from this requirement, including those with over $5 million in gross sales and more than 20 full-time employees
Small Business Beneficial Ownership Court Order Regulation Transparency
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