Fifth Circuit Lifts Stay on Corporate Transparency Act Reporting Requirements

The Fifth Circuit reinstated the Corporate Transparency Act, requiring entities to report beneficial ownership by January 13, 2025, after a legal stay.

On December 23, 2024, the Fifth Circuit Court of Appeals took a significant step by staying the nationwide injunction that had been blocking the enforcement of the Corporate Transparency Act (CTA) and its reporting requirements.

This new ruling revives the obligation for certain entities to comply with the reporting mandates outlined in the CTA.

Reporting Requirements

Under the CTA, certain corporations, limited liability companies (LLCs), and other organizations are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a part of the U.S. Department of Treasury.

To qualify as a beneficial owner, an individual must either hold at least a 25% ownership stake or exert substantial control over the entity.

Thanks to the recent decision by the appellate court, entities must now make their disclosures by January 1, 2025.

However, FinCEN has granted a brief extension, allowing most existing non-exempt entities to submit their reports by January 13, 2025.

Those unsure about how this deadline might affect them should seek further details here.

It’s essential for impacted organizations to evaluate their reporting duties and ensure they comply on time.

Legal Context

This ruling marks just one piece of the larger puzzle regarding ongoing legal challenges at the federal level, especially in the appellate courts.

Future developments in this or related cases may bring further changes to the current legal landscape.

Staying Informed

For insights on the Corporate Transparency Act and its implications, refer to our previous articles here.

To keep up with the latest news and updates, check here regularly.

Source: Natlawreview.com