AM Law Alert Update : Nationwide Injunction Stayed Pending Appeal

by Conner Bourne

On December 23, 2024, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit  stayed a nationwide preliminary injunction issued by the U.S. District Court for the Eastern District of Texas that had temporarily blocked enforcement of the Corporate Transparency Act (CTA) and its associated beneficial ownership reporting deadlines from the Financial Crimes Enforcement Network (FinCEN).

As a result of this ruling from the three-judge panel, on December 24, 2024, the plaintiff in the Texas case, Texas Top Cop Shop, Inc., requested an en banc review by the full Fifth Circuit of the stay ruling, with the plaintiff further requesting that such review be decided by January 6, 2025.

The CTA faces multiple ongoing legal challenges, and some cases may ultimately reach the Supreme Court. However, until further judicial or legislative action to the contrary, reporting companies must comply with CTA filing requirements and resume any compliance efforts that were paused during the injunction.

Here are the new FinCen compliance deadlines for reporting entities:

• Reporting companies that were created or registered prior to January 1, 2024, 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, 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.
• 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.
• Reporting companies that are created or registered in the United States on or after January 1, 2025, 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.

For more information, please contact Conner Bourne.

Click here to learn more about the Corporate Transparency Act.

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