
On December 23, 2024, the U.S. Fifth Circuit Court of Appeals took significant action by temporarily lifting the nationwide preliminary injunction on the Corporate Transparency Act (CTA).
The Court determined that the government’s rationale for the injunction’s continuation was insufficient.
Revised Compliance Deadlines
In light of this ruling, the Financial Crimes Enforcement Network (FinCEN) has adjusted the compliance deadline for most reporting companies, pushing it back to January 13, 2025.
Affected businesses should take this opportunity seriously and submit their beneficial ownership information reports by this new deadline.
The Court’s decision followed the granting of the government’s emergency motion for a stay as the appeal unfolds.
Furthermore, the Court expedited the process, ensuring the case would be presented to the next available oral argument panel.
Updated Filing Requirements
While recognizing the plaintiffs’ concerns about the timing of lifting the injunction, the Court noted that their lawsuit began in May 2024.
Given that the CTA has been in place for nearly four years, the preliminary injunction’s brief duration carried less weight in the Court’s assessment.
On that same day, FinCEN released updated guidance about the revised filing requirements stemming from the Court’s ruling.
They clarified that, with certain exceptions, all reporting companies must now submit their beneficial ownership information to FinCEN.
To account for the challenges created by the prior injunction, the new deadlines are outlined as follows:
- Reporting companies established or registered before January 1, 2024, must now provide their initial beneficial ownership information by January 13, 2025, extending the previous deadline of January 1, 2025.
- For companies formed or registered on or after September 4, 2024, with original deadlines between December 3 and December 23, 2024, the new deadline will also be January 13, 2025.
- Companies registered between December 3 and December 23, 2024, will receive an additional 21 days from their initial deadlines to complete their filings.
- Those qualifying for disaster relief may have extended deadlines beyond January 13, 2025, and should adhere to those later dates.
- Finally, any company created or registered on or after January 1, 2025, will have 30 days from when they receive public or actual notification of their registration to file their initial beneficial ownership information with FinCEN.
Recommendations for Reporting Companies
We urge all reporting companies to act swiftly and ensure their filings meet the new deadlines set by FinCEN.
Additionally, it’s crucial to remain vigilant about further updates from both the Court and FinCEN, as new guidance can emerge.
Source: Natlawreview