December 9, 2024

On December 3, 2024, Judge Mazzant of the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcement of the Corporate Transparency Act of 2024 (“CTA”), including a stay of its Beneficial Ownership Information Reporting Rule (“BOI Rule”). The BOI Rule requires legal entities formed or registered to do business in the U.S. to report ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) on or before January 1, 2025. Because of the injunction, the CTA and BOI Rule are paused pending the outcome of the lawsuit, and businesses need not comply with reporting requirements at this time. However, the Department of Justice has appealed the decision to the 5th Circuit Court of Appeals, where the government will presumably request that the decision be reversed or applied only to the parties in that particular case.

While the fate of the CTA and BOI Rule hangs in the balance, business owners in New York are not off the hook just yet. New York is slated to implement its own beneficial ownership reporting requirement, the so-called “New York LLC Transparency law,” beginning on January 1, 2026. This new law, which takes the form of an amendment to New York’s current LLC and Executive laws, requires limited liability companies (only) to identify each beneficial owner and each applicant of the LLC, unless an exemption applies.

All beneficial ownership disclosures and attestations of exemption will be filed electronically with the New York Department of State. Penalties for failure to file by the due date include fines and possible suspension, dissolution, or cancellation of an LLC.o your intake process.

Questions or comments? Please contact us at (917) 444-2879 or Admin@AndrieuxLaw.com.