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Merry CTA-mas! Fifth Circuit of Appeals Stays Injunction, Puts CTA Deadlines Back in Place, FinCEN Responds with Short Extension for Reporting Companies

12.26.24

By David H. Freedman and Jordan M. Small

On Monday, December 23, 2024, the Fifth Circuit Court of Appeals delivered a lump of coal to small business owners, as the Court stayed the preliminary injunction issued by the Eastern District of Texas – which had enjoined enforcement of the Corporate Transparency Act (“CTA”) and relieved millions of businesses from the Act’s reporting requirements. 

This Court, finding that the plaintiffs had not met their burden for an injunction, issued a stay, which temporarily puts the CTA’s reporting obligations back into effect pending further litigation. 

Late on Monday, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued the following response to the ruling, recognizing the impact of the twenty days that the injunction was in effect, and providing a small extension on the filing of Beneficial Ownership Information Reports (BOIR) under the CTA:

Alert: Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

  • 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.
  • As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and 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.

Importantly, this update provides an extra thirteen days for Reporting Companies that were created prior to January 1, 2024, which now have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. While this thirteen-day extension is not specifically proportional to the twenty days that the injunction was in place, it does give Beneficial Owners of Reporting Companies some extra time to un-pause the compliance process and prepare for filing without having to completely scramble over the holidays. 

Considering the ever-developing situation, the potential for changing deadlines and confusion, and the steep penalties for non-compliance, it is important that small businesses and other entities who are subject to the CTA’s reporting requirement prepare for filing. Despite the possibility of a further deadline extension, or the re-imposition of an injunction by the Supreme Court, Reporting Companies should complete their reports in order to ensure compliance and avoidance of any potential civil fines or criminal penalties.  

We will continue to follow these developments and provide further updates as they are available on our CTA blog and other social media.