The U.S. Court of Appeals has changed course again on the Corporate Transparency Act and the requirement to file Beneficial Ownership Information reports. Here is the summary of the latest:
- On December 3, 2024, the U.S. District Court for the Eastern District of Texas, in a ruling that applies across the country, issued a nationwide preliminary injunction suspending enforcement of the CTA and its reporting requirements.
- Next, the federal government immediately appealed the District Court’s ruling to the U.S. Fifth Circuit Court of Appeals.
- On December 23, 2024, the U.S Fifth Circuit Court of Appeals reversed the decision of the District Court in Texas and immediately reinstated all filing requirements under the CTA without change.
- Later in the day on December 23, FinCEN announced that it was extending deadlines under the CTA to provide reporting companies additional time to comply with the beneficial ownership reporting requirements of the CTA, given the period when the preliminary injunction under Texas Top Cop Shop was in effect. The new deadlines are as follows:
- Reporting companies that were created or registered (i.e., first qualified to do business) in the United States prior to January 1, 2024, will have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created or registered in the United States on or after September 4, 2024, that had a filing deadline between December 3, 2024, and December 23, 2024, will have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, will have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies that qualify for disaster relief (due to 2024 hurricanes) may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
- Reporting companies that are created or registered in the United States on or after January 1, 2025, will have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
- The next step in the Texas Top Cop Shop case is consideration of the merits of FinCEN’s appeal by the next available oral argument panel of the Fifth Circuit Court of Appeals. It is anticipated that oral argument will occur in January 2025. Litigation in the Texas Top Cop Shop case and in other Federal courts throughout the U.S. to resolve the constitutionality of the CTA will continue into 2025. The status of the CTA is likely to be a topic considered at the Executive and Congressional levels, as well.
DISCLAIMER: The information provided above is for informational purposes only, is general in nature, and is not meant to be an exhaustive list of all reporting requirements under the CTA. It does not constitute legal advice and should not be interpreted or relied on as such. For legal advice tailored to your specific circumstance, please reach out to one of our qualified attorneys.