Yesterday, the Fifth Circuit Court of Appeals temporarily lifted the nationwide injunction suspending the Corporate Transparency Act ("CTA") that had been imposed by the District Court for the Eastern District of Texas. The Fifth Circuit stayed the District Court's injunction, putting the CTA back into effect pending the outcome of the government's appeal.
The Fifth Circuit found that the government had made a strong showing in support of the constitutionality of the CTA, which will be the main issue on appeal. Unless the Fifth Circuit changes course and affirms the District Court (or there are further developments as discussed below), the CTA will now continue in effect at least until the Fifth Circuit appeal is resolved.
The now-stayed injunction had suspended all deadlines for filing the initial beneficial ownership report required under the CTA, including the January 1, 2025, filing deadline for businesses formed before January 1, 2024. The Fifth Circuit decision would have reinstated the January 1, 2025, deadline. However, after the decision, the Financial Crimes Enforcement Network ("FinCEN") posted on its website that it was extending the January 1, 2025, filing deadline due to the possibility that filers may need more time because of the injunction having been in effect. The new filing deadlines issued by FinCEN are:
- Reporting companies that were created or registered prior to January 1, 2024, 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, 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, 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 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, 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.
We will continue to monitor CTA developments. Further judicial action is possible at the Fifth Circuit Court of Appeals, the United States Supreme Court or in other lawsuits concerning the CTA that are pending elsewhere. Additional guidance may be issued by FinCEN or other governmental authorities.
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