IMPORTANT NEW UPDATE BENEFICIAL INTEREST OWNERSHIP REPORTING REQUIREMENTS UNDER FINCEN AND THE CORPORATE TRANSPARENCY ACT – REPORTING REQUIREMENTS ARE BACK ON
As we reported previously, on December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in a case that that enjoined the federal government from enforcing the Corporate Transparency Act (CTA). As a result, the District Court’s order barred enforcement of the CTA and the implementing rules adopted by FinCEN nationally. As a result, reporting companies no longer needed to comply with the CTA’s upcoming January 1, 2025, deadline for filing beneficial ownership reports.
The CTA, which went into effect January 1, 2024, requires most entities in the United States (corporations, limited liability companies, and limited partnerships, known as “reporting companies”), to disclose information about their beneficial owners, being the persons who ultimately own or control a company. The reporting requirements are enforced by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
In response to the District Court’s order, the federal government sought an emergency stay of the nationwide preliminary injunction, and on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) granted the federal government’s request for an emergency stay.
As a result, the reporting requirements for all entities subject to these requirements are again applicable and require compliance. However, FinCEN, recognizing that subject entities may not have time given the timing of the emergency stay granted by the Fifth Circuit, issued an alert extending the deadlines for such entities to file initial beneficial ownership
information reports with FinCEN. That alert can be viewed here: https://www.fincen.gov/boi. The applicable extensions granted to comply include:
Again, we continue to monitor developments in this area, as additional updates from FinCEN or further court rulings could impact these requirements.
If you have any questions on this matter or if the CTA reporting requirements apply to your company, please contact us.
As we reported previously, on December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in a case that that enjoined the federal government from enforcing the Corporate Transparency Act (CTA). As a result, the District Court’s order barred enforcement of the CTA and the implementing rules adopted by FinCEN nationally. As a result, reporting companies no longer needed to comply with the CTA’s upcoming January 1, 2025, deadline for filing beneficial ownership reports.
The CTA, which went into effect January 1, 2024, requires most entities in the United States (corporations, limited liability companies, and limited partnerships, known as “reporting companies”), to disclose information about their beneficial owners, being the persons who ultimately own or control a company. The reporting requirements are enforced by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
In response to the District Court’s order, the federal government sought an emergency stay of the nationwide preliminary injunction, and on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) granted the federal government’s request for an emergency stay.
As a result, the reporting requirements for all entities subject to these requirements are again applicable and require compliance. However, FinCEN, recognizing that subject entities may not have time given the timing of the emergency stay granted by the Fifth Circuit, issued an alert extending the deadlines for such entities to file initial beneficial ownership
information reports with FinCEN. That alert can be viewed here: https://www.fincen.gov/boi. The applicable extensions granted to comply include:
- Reporting companies that were created or registered prior to January 1, 2024, have until January 13, 2025 (rather than January 1, 2025) to file their initial beneficial ownership information reports with FinCEN.
- 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 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 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
Again, we continue to monitor developments in this area, as additional updates from FinCEN or further court rulings could impact these requirements.
If you have any questions on this matter or if the CTA reporting requirements apply to your company, please contact us.
