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Corporate Transparency Act Update: Back in Effect, Extended Deadlines and What It Means for You

Update

On December 26, 2024, the Fifth Circuit vacated the motion panel’s order staying the injunction pending its consideration of the constitutionality of the CTA. The court’s review will be expedited. In issuing its order, the Fifth Circuit noted it’s desire to maintain the “constitutional status quo” while the proceedings advance. Please refer to our latest alert for more information.

The Bottom Line

  • The U.S. Court of Appeals for the Fifth Circuit has reinstated the enforceability of the Corporate Transparency Act (CTA) and its implementing regulations, reigniting compliance priorities nationwide.
  • FinCEN has extended the filing deadlines for reporting companies to submit their initial beneficial ownership information reports.
  • The legal debate over the CTA’s constitutionality is far from over and is unlikely to be resolved until 2025.

Fifth Circuit Reverses District Court

Yesterday, the U.S. Court of Appeals for the Fifth Circuit reinstated the enforceability of the Corporate Transparency Act (CTA) and its implementing regulations. Following the preliminary injunction issued by the U.S. District Court for the Eastern District of Texas on December 3, 2024, the U.S. Department of Justice (DOJ) filed an emergency appeal to the Fifth Circuit seeking a stay of the injunction. The Fifth Circuit granted the motion and lifted the injunction pending appeal. Notably, the Fifth Circuit indicated that the DOJ showed the likelihood of its success that the CTA is constitutional.

As a result, reporting companies are, once again, required to file beneficial ownership reports.

New Extended Deadlines

Shortly after the Fifth Circuit released its order, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the filing deadlines as follows:

  • Reporting companies created or registered in the United States prior to January 1, 2024, now 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 previously had a filing deadline between December 3, 2024, and December 23, 2024, now 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, now have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
  • As previously required, reporting companies created or registered in the United States on or after January 1, 2025, will have 30 days from their date of formation or registration to file their initial beneficial ownership information reports with FinCEN.

Navigating the Unknown: The Future Awaits

We are keeping a close eye on the legal battles over the CTA’s constitutionality—a debate sure to carry into 2025. Reporting companies should continue to collect their beneficial ownership information and prepare for the newly extended filing deadlines.