Corporate Transparency Act's Reporting Obligations Reinstated
The United States Court of Appeals for the Fifth Circuit in Texas Top Cop Shop, Inc. has reinstated the reporting obligations under the Corporate Transparency Act (CTA) by granting the government’s emergency motion for a stay pending appeal.
To provide additional time to comply with the CTA’s reporting requirements, the Financial Crimes Enforcement Network (FinCEN) has extended the January 1, 2025 filing deadline to January 13, 2025 and extended other filing deadlines.
Fifth Circuit Order
As noted in our prior client alert, the United States District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc. granted a preliminary injunction enjoining FiCEN from enforcing the Corporate Transparency Act’s reporting requirements and staying its January 1, 2025 filing deadline. In connection with its appeal of that preliminary injunction, the government applied for a stay of the injunction pending its appeal. The Fifth Circuit granted that stay.
The Court observed that the CTA “falls squarely within Congress’s authority” and concluded that the CTA is plainly constitutional as applied to the plaintiffs in the district court action.
FinCEN Extension of Filing Deadlines
Recognizing that reporting companies may need additional time to comply given the duration of the district court’s preliminary injunction, FinCEN extended the deadline for filing a beneficial ownership information report under the Corporate Transparency Act from January 1, 2025 until January 13, 2025.
In addition, FinCEN provided the following additional filing relief and guidance.
- Companies created on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 now have until January 13, 2025 to file.
- Companies created 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.
- Companies that qualify for disaster relief having extended deadlines that fall beyond January 13, 2025 may still take advantage of the extended deadlines.
- Companies created on or after January 1, 2025 will have 30 days to file after receiving actual or public notice that their creation is effective.
- Members of the National Small Business Association (as of March 1, 2024) are not currently required to report their beneficial ownership information to FinCEN at this time because of the decision in National Small Business United v. Yellen.
This action by FinCEN was unexpected because it had earlier indicated that the CTA filing obligations were suspended only for the duration of the district court’s preliminary injunction and because the government pressed the Fifth Circuit for an early ruling on its emergency motion for a stay to maintain the January 1, 2025 deadline in place.