In our prior notes of December 4, 9, and 13, 2024, we reported that (1) a district court in Texas issued a nationwide injunction halting implementation of the Corporate Transparency Act (CTA), (2) the Financial Crimes Enforcement Network (FinCEN) acknowledged that companies need not file CTA mandated disclosures while that injunction remained in effect. Subsequently, the U.S. Department of Justice (DOJ) moved to stay the injunction pending appeal. The district court rejected that motion, but on December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted the government’s motion, staying the district court’s injunction and expediting briefing of the appeal. In so doing, the Court concluded that the government had “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.” In addition, the Court rejected the plaintiffs’ warnings that “lifting the . . . injunction days before the compliance deadline would place an undue burden on them,” reasoning that the plaintiffs filed suit only months ago and the injunction had been in place mere weeks, whereas businesses have had “nearly four years . . . to prepare since Congress enacted the CTA, as well as the year since FinCEN announced the reporting deadline.”
FinCEN quickly responded to the Fifth Circuit ruling. Recognizing that reporting companies may need more time to comply with CTA filing obligations given that the district court’s preliminary injunction paused CTA filing obligations, CTA extended filing deadlines as follows:
- For reporting companies that were created or registered (1) prior to January 1, 2024, or (2) on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024, the filing deadline is extended from January 1, 2025 to January 13, 2025.
- For reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024, the filing deadline is extended 21 days beyond their original filing deadline.
- Certain reporting companies have already received deadline extensions due to their being located in areas that suffered from natural disasters. For reporting companies with these natural disaster filing deadline extensions, the filing deadline is extended to January 13, 2025. (Of course, for companies with disaster relief deadline extensions that already fall after January 13, 2025, they retain their original filing deadline.)
- Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.) (e.g., members of the National Small Business Association as of March 1, 2024) are not currently required to report their beneficial ownership information to FinCEN.
If you have any questions concerning this memorandum, please feel free to contact your regular contacts at the firm.