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CORPORATE TRANSPARENCY ACT IS BACK IN EFFECT
As you may recall from our previous legal alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (“CTA”). This injunction paused the reporting requirements under the Beneficial Ownership Information Reporting (“BOIR Rule”) pending further action from the court.
Since that time, the Department of Justice filed an emergency motion for a stay pending appeal, and on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued an order granting a stay of the nationwide injunction. As a result, the CTA filing requirements have been reinstated.
Revised Reporting Deadlines:
In light of the new order, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a press release extending the original reporting deadlines as follows:
- Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created 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 file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after January 1, 2025 will continue to 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.
What does this mean for business owners?
Those businesses who have already filed an initial BOIR do not need to do anything further. Businesses who have not yet filed a BOIR will now need to prepare to file their BOIR as stated above.
The timelines for further updates remain unclear and, for now, we are counseling clients to be prepared to file by the applicable deadlines above if their businesses meet the reporting obligation requirements under the CTA. There is the possibility of an appeal to the U.S. Supreme Court and we will keep you updated if such an appeal is filed.
As usual, Ross Brittain & Schonberg will continue to monitor any for further updates and provide guidance. If you have any questions, or need assistance compiling and filing the BOIR, please contact Kimberly Basta at kbasta@rbslaw.com.