Every time I blink, the need and timing to comply with the CTA changes. Check with your lawyer to make sure your compliance, if necessary, is timely.
BUT WAIT!!!
As it stands now, businesses subject to the CTA’s requirements will not be required to submit beneficial ownership reports until further court rulings are made. This ongoing legal uncertainty may affect how companies prepare for compliance with the CTA in the future.
The U.S. Court of Appeals for the Fifth Circuit has reinstated a nationwide preliminary injunction against enforcement of the Corporate Transparency Act and its reporting rule. The decision, issued on December 26, 2024, vacates a prior stay and delays the requirement for companies to file beneficial ownership information (BOI) reports, including those originally due by January 13, 2025.
The appellate court’s action preserves the constitutional status quo while it expedites its review of substantive arguments, including the CTA’s constitutionality. Companies are advised to monitor developments closely but are not currently required to file BOI reports unless the injunction is lifted. Voluntary filings remain an option.
BREAKING NEWS
Following a Fifth Circuit decision on December 23, 2024, staying a preliminary injunction, FinCEN announced extended filing deadlines for beneficial ownership information reports under the Corporate Transparency Act:
- Companies created/registered before January 1, 2024, now have until January 13, 2025, to file.
- Companies created/registered between September 4, 2024, and December 23, 2024, with deadlines between December 3-23, 2024, have until January 13, 2025, to file.
- Companies created/registered between December 3, 2024, and December 23, 2024, have 21 extra days from their original deadline.
- Companies created/registered on or after January 1, 2025, must file within 30 days.
The saga continues.
OLD NEWS
The United States Court of Appeals for the Fifth Circuit issued a significant ruling on December 23, 2024, regarding the Corporate Transparency Act (CTA) in Texas Top Cop Shop v. Garland. The act requires certain nonexempt companies to disclose their beneficial owners to combat financial crimes; its reporting deadline is set for January 1, 2025.
Background of the Case
On December 3, 2024, a district court granted a preliminary injunction against the CTA, declaring it unconstitutional and issuing a nationwide injunction. This decision was notable as it went beyond what any party had requested and differed from other courts that had either tailored relief to specific parties or denied it altogether.
In response, the government filed an emergency motion with the appellate court seeking a stay of this injunction. The court evaluated this motion based on four factors: likelihood of success on the merits, irreparable injury if the stay is not granted, potential injury to other parties, and public interest.
Court’s Findings
- Likelihood of Success: The appellate court found that the government demonstrated a strong likelihood of success in defending the CTA’s constitutionality. The court noted that Congress had enacted the CTA under its broad authority to regulate economic activity under the Commerce Clause, aiming to address issues related to anonymous ownership and illicit financial activities.
- Irreparable Injury: The court recognized that halting enforcement of a statute enacted by Congress would cause irreparable harm to the government. The inability to enforce the CTA would undermine efforts to combat financial crime and national security.
- Harm to Other Parties: The court determined that any harm to businesses from compliance with the CTA is minimal compared to the public interest in enforcing financial regulations. It estimated that completing the required report would take about ninety minutes and cost approximately $85.
- Public Interest: The public interest strongly favors maintaining the CTA’s enforcement as it plays a crucial role in combating money laundering and protecting national security interests.
Conclusion
As a result of these findings, the Fifth Circuit granted the government’s motion for a temporary stay of the district court’s order and injunction pending appeal. The appellate court also expedited the appeal for prompt consideration by an oral argument panel. This decision underscores the ongoing legal debates surrounding financial regulation and corporate transparency in the United States. Keep an eye on continuing developments.
Deadlines have been extended. See https://fincen.gov/boi.