December 26th, 2024

Corporate Transparency Act Back in Effect

This is an update to our Corporate Alert issued on December 12, 2024.

On December 23, 2024, the Fifth Circuit Court of Appeals lifted the preliminary injunction on enforcement of the Corporate Transparency Act (“CTA”) issued by the District Court for the Eastern District of Texas on December 3, 2024.[1] The Fifth Circuit’s decision effectively reinstates the CTA and its beneficial ownership information (“BOI”) reporting requirements.[2] A majority of the Fifth Circuit’s appellate panel found that the government “made a strong showing that it is likely to succeed on the merits in defending [the] CTA’s constitutionality,” holding, in part, that the reporting requirements fall within Congress’s Commerce Clause power. The decision stays the nationwide preliminary injunction pending appeal, which is being expedited for oral argument.

Shortly after the Fifth Circuit ruling, the Financial Crimes Enforcement Network (“FinCEN”) issued guidance extending the BOI reporting deadline to January 13, 2025 for most reporting companies.[3] The current reporting deadlines are as follows[4]:

  1. Reporting companies that were created or registered prior to January 1, 2024 now have until January 13, 2025 to file their initial BOI reports with FinCEN. (Before the Eastern District of Texas court decision on December 3, 2024, these companies were required to report by January 1, 2025.)
  2. Reporting companies created or registered in the U.S. on or after September 4, 2024 that previously had a reporting deadline between December 3, 2024 and December 23, 2024 now have until January 13, 2025 to file their initial BOI reports with FinCEN.
  3. Reporting companies created or registered in the U.S. on or after December 3, 2024 and on or before December 23, 2024 now have an additional 21 days from their original reporting deadline to file their initial BOI reports with FinCEN.
  4. Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
  5. Reporting companies created or registered in the U.S. on or after January 1, 2025 will have 30 days to file their initial BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

    If you have questions, please contact Jeffrey Marks at (212) 826 5536 or jmarks@fkks.com, Jay Rand at (212) 705 4825 or jrand@fkks.com, Lee Silver at (212) 705 4826 or lsilver@fkks.com, Deborah Wolfe at (212) 826 5573 or dwolfe@fkks.com, Jonah Brill at (212) 705 4897 or jbrill@fkks.com, or any other member of the Frankfurt Kurnit Corporate Group.

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[1] Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir. Opinion 12/23/24). A copy of the opinion can be accessed here: Fifth Circuit Decision.
[2] A prior alert explaining the Texas Top Cop Shop ruling is available at Federal Court Suspends Corporate Transparency Act Enforcement — Frankfurt Kurnit Klein & Selz.
[3] For additional information regarding extended deadlines, see Beneficial Ownership Information Reporting | FinCEN.gov.
[4] These deadlines apply to reporting companies other than the plaintiffs in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), which remains on appeal.