Corporate Transparency Act - Reporting Deadlines
We recently reported that on December 3, 2024, the U.S. District Court for the Eastern District of Texas (Sherman Division), issued a preliminary injunction (the “Preliminary Injunction”) in Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.) which temporarily blocked enforcement of the Corporate Transparency Act (the “CTA”), the federal law that came into effect on January 1, 2024. Background information on the CTA can be found in our previous letters to clients, available here and here.
On December 23, 2024, the US Court of Appeals for the Fifth Circuit issued a stay order (the “Order”) pending appeal of the Preliminary Injunction. Following the Order from the appellate court, any entity that is not exempt from the reporting obligations under the CTA was required once again to file its BOI report before the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Pursuant to the Order, the reporting entities were to file their BOI report by certain extended reporting deadlines that had been published by FinCEN on a statement on its website, the earliest of which was a January 13, 2025 deadline.
While we were drafting the summary of this update for our clients, on December 26, 2024, three days after the issuance of the Order by the Court of Appeals for the Fifth Circuit, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s Order. Accordingly, as of December 26, 2024, the Preliminary Injunction is back in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.
Please bear in mind that there is no definitive judgment yet on the constitutionality of the CTA from either the US District Court for the Eastern District of Texas or the Fifth Circuit. It is still possible that challenges to the CTA ultimately may change or invalidate all or part of the CTA’s reporting requirements. While reporting entities do not need to file their BOI reports with FinCEN at this time, they should be prepared to file their reports on a fairly short timeframe if such obligation is once again reinstated. We will continue to monitor the situation and keep you posted on additional developments on this matter.
Please note that this letter is sent for informational purposes only and does not constitute legal advice.
If you have any questions regarding the CTA or this letter, please don’t hesitate in contacting our office at (281) 367-2222 or acasas@stibbsco.com.
