Court of Appeals Reinstates Corporate Transparency Act Reporting Deadlines

 Posted on December 26, 2024 in Business

The 5th Circuit Court of Appeals has lifted the nationwide injunction issued by the U.S. District Court for the Eastern District of Texas in early December that blocked the enforcement of the Corporate Transparency Act ("CTA") and its January 1, 2025, Beneficial Ownership Information ("BOI") reporting deadline.

On December 23, 2024, the appeals court determined that the government made a strong showing on its likelihood of success on the merits of defending the CTA’s constitutionality and stayed the lower court’s injunction. The three-judge panel disagreed with the lower court’s assessment that enforcement of the CTA exceeds Congress’s powers and stated that the CTA’s reporting requirements are well within Congress’s broad authorities to regulate economic activity under the Constitution’s Commerce Clause.

In response to the 5th Circuit’s ruling, FinCEN announced new reporting deadlines to alleviate pressure on reporting entities that may not be prepared to meet the original January 1^st deadline:

• Reporting companies registered or formed prior to January 1, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN.
• Reporting companies registered or formed 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 BOI reports with FinCEN.
• Reporting companies registered or formed 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 BOI reports with FinCEN.
• Reporting companies registered or formed on or after January 1, 2025 have 30 days to file their initial BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

We encourage all reporting companies to comply with the BOI reporting deadlines highlighted above and to continue monitoring developments through FinCEN's Website. Please contact the attorneys at Mallery s.c. with any questions or concerns regarding CTA compliance.