UPDATE: A December 26, 2024 decision by a separate merits-panel of the Fifth Circuit Court of Appeals has lifted the stay of the preliminary injunction originally granted by the motions-panel of the Fifth Circuit on December 23, 2024. This decision halts compliance requirements for Reporting Companies under the Corporate Transparency Act, including the submission of Beneficial Ownership Information Reports ("BOIR"). Please see our latest alert for more information.
On December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted a stay reversing the nationwide preliminary injunction which had temporarily halted enforcement of the Corporate Transparency Act (the "Act"). On December 3, 2024, a Texas District Court's injunction temporarily suspended compliance requirements under the Act, which required existing Reporting Companies to file Beneficial Ownership Information Reports ("BOIRs") on or before January 1, 2025.
A few hours after the Court's decision on December 23, the Department of Treasury's Financial Crimes Enforcement Network ("FinCEN") responded to this momentous ruling by extending the January 1, 2025 deadline for existing Reporting Companies (those formed prior to 2024) to January 13, 2025. This 12-day extension means that existing Reporting Companies have an additional 20 days to complete their filings from the date of the injunction reversal – the same time period between the District Court's initial decision and the Fifth Circuit's ensuing reversal.
FinCEN also granted similarly-fashioned relief to certain Reporting Companies formed in the fourth quarter of 2024, as follows:
- Reporting Companies formed 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 BOIRs.
- Reporting companies formed 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 BOIRs with FinCEN.
Reporting Companies formed in 2025 will still only have 30 days to file their BOIRs. In all cases, failure to file could result in civil and criminal penalties under the Act.
This situation continues to evolve. In the coming days, litigants could seek further review from the Fifth Circuit, or file an appeal with the United States Supreme Court.
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