Article highlights:
- Fifth Circuit Court of Appeals Decision
- Reporting Companies Once Again Required to File.
- New Extended Filing Deadlines:
- Companies created or registered prior to January 1, 2024
- Companies created or registered on or after September 4, 2024, with a filing deadline between December 3, 2024, and December 23, 2024
- Companies created or registered on or after December 3, 2024, and on or before December 23, 2024
- Reporting companies qualifying for disaster relief
On December 23, 2024, the Fifth Circuit Court of Appeals removed the FinCEN Beneficial Owner Information (BOI) reporting order imposed by a Texas district court judgment on December 3, which was then challenged by the Department of Justice.
In light of this ruling, reporting entities, except as noted below, are once again obliged to submit Beneficial Ownership Information reports with FinCEN. However, recognizing that reporting corporations may need more time to comply owing to the period while the preliminary injunction was in force, the Department of the Treasury has extended the reporting deadlines as follows.
- Reporting firms formed or registered before January 1, 2024: These companies 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 firms formed or registered in the United States on or after September 4, 2024, with a reporting date between December 3, 2024, and December 23, 2024, have until January 13, 2025, to submit their first Beneficial Ownership Information reports to FinCEN.
- Reporting firms formed or registered in the United States on or after December 3, 2024, and before December 23, 2024, have an extra 21 days after their original reporting date to submit their first Beneficial Ownership Information reports to FinCEN.
- Reporting firms that qualify for disaster relief: These firms may have deadlines that stretch beyond January 13, 2025. They should conform to whatever deadline comes later.
- Reporting entities established or registered in the United States on or after January 1, 2025, have 30 days to submit their first Beneficial Ownership Information reports with FinCEN after obtaining real or public notification that their formation or registration is effective.
- Plaintiffs in this case, including Isaac Winkles, the National Small Business Association, and members of the association as of March 1, 2024, are not required to report Beneficial Ownership Information to FinCEN, according to the alert titled "Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)".
Background:
On Tuesday, December 3, 2024, the United States District Court for the Eastern District of Texas, Sherman Division, granted a worldwide preliminary injunction in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.). On December 23, 2024, the United States Court of Appeals for the Fifth Circuit issued a stay of the district court's preliminary injunction against the Corporate Transparency Act (CTA) pending the result of the Department of the Treasury's appeal.
The Texas Top Cop Shop lawsuit is one of numerous challenges to the CTA that are now ongoing in courts around the nation. Several district courts, notably the United States District Courts for the Eastern District of Virginia and the District of Oregon, have refused similar injunction petitions and ruled in favor of the Department of the Treasury, upholding the CTA's legality.
In response to the Texas judgment, the Department of Justice filed a Notice of Appeal on December 5, 2024, requesting that the injunction be stayed pending appeal. The government remains convinced of the CTA's legality and is vigorously seeking its enforcement.