Enforcement of Corporate Transparency Act Allowed – New Reporting Deadline of 1/13/2025 for Companies Formed Prior to 1/1/2024

The Corporate Transparency Act’s Reporting Requirements Are Back in Effect Pending Further Appeal

On December 3, 2024, in the case of Texas Top Cop Shop, Inc. v. Garland, a Texas federal court issued a nationwide preliminary injunction enjoining enforcement of the Corporate Transparency Act (31 U.S.C. § 5336) (CTA) and its reporting rules (as referenced in our prior client alert).

Thereafter, the U.S. Department of Justice (DOJ) filed an emergency motion with the U.S. Court of Appeals for the Fifth Circuit to stay the nationwide preliminary injunction. On December 23, 2024, the Fifth Circuit ruled to lift the Texas district court’s injunction, thus reinstating the reporting requirements for entities subject to the CTA.

In response to the order, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published an alert on its Beneficial Ownership Information webpage to extend the reporting deadline to January 13, 2025, for reporting companies formed prior to January 1, 2024, and provide other updates. See here for the full alert.

As set forth in the alert:

• A new January 13, 2025 reporting deadline now applies to:
  • Reporting companies that were created or registered in the U.S. prior to January 1, 2024.
  • Reporting companies that were created or registered in the U.S. on or after September 4, 2024, with an original filing deadline between December 3, 2024, and December 23, 2024.
• Reporting companies created or registered in the U.S. between December 3, 2024, and December 23, 2024, now have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• The deadline for reporting companies that are created or registered in the U.S. on or after January 1, 2025, has not changed. Such reporting companies 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.

Although this continues to be a rapidly developing matter, and it is possible that the plaintiffs could seek additional review from the Fifth Circuit or relief from the U.S. Supreme Court, we recommend that reporting companies take action as soon as possible to comply with the CTA’s new reporting deadlines.

Additional Assistance

For further assistance, please contact a member of our Corporate and Business Law Practice Team or the Phillips Lytle attorney with whom you have a relationship.