With the Preliminary Injunction of the Corporate Transparency Act Stayed, FinCEN Extends Deadlines for Compliance

The federal government appealed the District Court’s ruling to the Fifth Circuit Court of Appeals and sought a stay of the injunction issued by the District Court until the appeal on the merits of the District Court’s opinion could be ruled upon. In a December 23, 2024, Unpublished Order (per curiam), the Court of Appeals held that “the government has demonstrated that a stay is warranted.” Consequently, it “ORDERED that the government’s emergency motion for a stay pending appeal is GRANTED …. [and] this appeal is EXPEDITED to the next available oral argument panel.” This action by its terms reinstated all filing requirements under the CTA without change, including the January 1, 2025, deadline for initial reporting by companies in existence as of January 1, 2024.

However, later on December 23, FinCEN announced that it was extending deadlines under the CTA to provide reporting companies additional time to comply with the beneficial ownership reporting requirements of the CTA, given the period when the preliminary injunction under Texas Top Cop Shop was in effect. The new deadlines are as follows:

• Reporting companies that were created or registered (i.e., first qualified to do business) in the United States prior to January 1, 2024, will 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, will 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, will have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies that qualify for disaster relief (due to 2024 hurricanes) may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
• Reporting companies that are created or registered in the United States on or after January 1, 2025, will 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.
• As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.),” Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN.

The next step in the Texas Top Cop Shop case is consideration of the merits of FinCEN’s appeal by the next available oral argument panel of the Fifth Circuit Court of Appeals. It is anticipated that oral argument will occur in January 2025. Litigation in the Texas Top Cop Shop case and in other Federal courts throughout the U.S. to resolve the constitutionality of the CTA will continue into 2025. The status of the CTA is likely to be a topic considered at the Executive and Congressional levels, as well.