CTA Preliminary Injunction Stayed – Reporting Obligations Return
What happened?
Yesterday, December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit reinstated January deadlines, discussed below, for required reporting companies to submit initial beneficial ownership information reports (“BOIR”) under the Corporate Transparency Act (“CTA”).
As previously reported in our alert Judge Blocks Enforcement of CTA, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide Preliminary Injunction which blocked enforcement of the CTA and its implementing regulations.
After this order, on December 13, 2024, the U.S. Department of Justice filed an Emergency Motion for Stay Pending Appeal of the Preliminary Injunction with the Fifth Circuit Court of Appeals.
What is next?
With yesterday’s decision, the Fifth Circuit stayed and blocked the effect of the lower court’s nationwide injunction, allowing the CTA and its implementing regulations to be enforced.
The Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) issued updated guidance related to filing deadlines on December 23, 2024.
According to this new guidance reporting companies must comply with the following new deadlines to submit their initial BOIR:
- Reporting companies which existed prior to January 1, 2024, are required to file their initial BOIR by January 13, 2025.
- Reporting companies that were formed on or after September 4, 2024, that would have been required to file a report between December 3rd and December 23rd are required to file their initial BOIR by January 13, 2025.
- Reporting companies formed between December 3rd and December 23rd will be granted a 21-day extension to their respective original filing deadline.
All other requirements under the CTA, including reporting requirements for new entities and updated reports, have been reinstated.
McGrath North will continue to monitor this fluid situation and provide updates as necessary. If you have any questions or if you need any assistance with CTA compliance, please don’t hesitate to contact your McGrath North attorney.
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