Fifth Circuit Stays Injunction Against Corporate Transparency Act

On By Littum

Updates to reporting deadlines for beneficial ownership information – Reporting requirements for beneficial ownership information now apply, with deadline extensions

In light of a decision by the Federal Court of Appeal on December 23, 2024, reporting companies, except as noted below, are again required to submit beneficial ownership information to FinCEN. However, because the Treasury Department recognizes that reporting companies may need additional time to comply given the period during which the interim injunction had been in effect, it has extended the reporting deadline as follows:

  • Reporting companies that were created or registered before January 1, 2024 have until January 13, 2025 to submit their initial beneficial ownership information to FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
  • Reporting companies incorporated 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 submit their initial beneficial ownership information to FinCEN.
  • Reporting companies incorporated or registered in the United States on or after December 3, 2024, will have an additional 21 days from their initial filing deadline to submit their initial beneficial ownership information to FinCEN.
  • Reporting businesses that qualify for disaster relief may have extended deadlines beyond January 13, 2025. These businesses must meet the later deadline.
  • Reporting companies formed or registered in the United States on or after January 1, 2025, have 30 days to submit their initial beneficial ownership information to FinCEN after receiving actual or public notice that their formation or registration is effective.
  • As stated in the warning entitled “Notice Regarding National Small Business United v. Yellen, no. 5:22-cv-01448 (ND Ala.)”, Plaintiffs in National Small Business United v. Yellenno. 5:22-cv-01448 (ND 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.

Tuesday 3 December 2024 regarding Texas Top Cop Shop, Inc., et al. w. Garland, et al., No. 4:24-cv-00478 (ED Tex.), the United States District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction. On December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction enjoining the Corporate Transparency Act (CTA), entered in the case of Texas Top Cop Shop, Inc. against Garlandpending the outcome of the Ministry of Finance’s ongoing appeal of the district court’s order. Texas Top Cop Shop is just one of several cases challenging the CTA pending in courts around the country. Several district courts have rejected requests to enjoin the CTA, ruling in favor of the Treasury Department. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional. For that reason, the Department of Justice, on behalf of the Treasury Department, filed a notice of appeal on December 5, 2024, separately requesting a stay of the ban pending appeal to the District Court and the United States Court of Appeals for the Fifth Circuit.