Are you ready for some BOI-court drama? If you follow our Marcos-Law.com blogs, you remember that a court in Texas stopped the mandate for all LLC owners (and other entity owners) in the United States of America to file BOI, alleging that CTA and the BOI mandate fall outside of Congress’s powers to regulate interstate and foreign commerce.
But just before Christmas 2024, the U.S. Fifth Circuit Court of Appeals in Texas, Top Cop Shop, Inc. v. Garland, 5th Cir. Appeal No. 24-40792 (Dec. 23, 2024) reversed the U.S. District Court and dissolved the preliminary injunction. This means the BOI filings are due by January 13, 2025.
This matters because it affects about 32 million LLC owners, including citizens, immigrants, and foreign entrepreneurs doing business through these and similar entities in the USA.
What is BOI? Understanding BOI and The Corporate Transparency Act
In essence, BOI is a database of LLCs created by Congress under the Corporate Transparency Act, a bipartisan law.
Congress signed the Corporate Transparency Act, or CTA, into law in January 2021. It aims to enhance corporate transparency and combat illicit financial activities like money laundering, tax evasion, and terrorism financing. The Act introduces new regulations mandating companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is the top financial intelligence unit under the United States Department of the Treasury and combats financial crimes in the USA.
This mandate includes substantial penalties for LLC owners who do not comply, including fines and even jail time.
What Is Beneficial Ownership?
Beneficial ownership refers to the individuals who ultimately own or control a company, even if their names aren’t on legal formation documents. This could include individuals who hold significant ownership percentages or exercise substantial control over the company. That includes owners, certain relatives, managers, employees, or even lawyers if they exercise more than 25 percent control of the legal entity (LLC or others).
The CTA’s initial mandate required all LLCs to report their Beneficial Owners by December 31st, 2024.
After a Texas court attempted to stop the BOI mandate, an appeals court reinstated the law and moved the deadline to January 13th, 2025. This is where we stand as of the date this blog is published.
Where do I file BOI?
You can file BOI by following this link: www.fincen.gov.
BOI: Attorney Marcos Recommendation
Attorney Marcos E. Garciaacosta has been following developments in the BOI report closely and has always recommended that business owners follow suit.
“Regardless of what the courts do, we recommend LLC owners file their report.
Attorney Marcos said the world is moving toward more transparency, so some form of BOI will be implemented sooner or later.
As of November 2024, only about 6 million LLCs have filed the BOI report, according to FinCEN.gov, the agency in the Department of Justice responsible for implementing the BOI Report.
Contact Attorney Marcos to Talk about BOI or Other Business Matters
Contact our firm if you have questions about CTA-BOI compliance or other business law or intellectual property issues.
You can contact us at (480) 324-6378, and we will schedule a consultation with Attorney Marcos E. Garciaacosta.