Fifth Circuit Strikes Down Injunction; CTA In Effect With Short Deadline Extension
On December 23, the U.S. Court of Appeals for the Fifth Circuit issued an Order staying the nationwide injunction that previously halted the enforcement of the Corporate Transparency Act (the “CTA”). Without further clarification from FinCEN or a court-ordered extension of the end-of-year deadline, all pre-2024 business entities required to file under the CTA must now do so by December 31, 2024.
In its Order, the Court stated that the government “made a strong showing that it is likely to succeed on the merits in defending the CTA’s constitutionality” and that the CTA reporting requirements fall “within ‘more than a century of the Supreme Court’s Commerce Clause Jurisprudence.’” The Court further opined that the last-minute nature of the nationwide injunction would also inflict “irreparable harm” against the government, while any harm staying the prior injunction may cause businesses “is minimal.” Finally, the Court ordered that any appeal of its decision to stay the injunction be expedited to the next available oral argument panel.
In response to the Order, FinCEN sent out the following alert providing a minor extension for all reporting companies that are required to file beneficial ownership information:
- Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file.
- Reporting companies created or registered 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.
- Reporting companies created or registered 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.
FinCEN reiterated that reporting companies formed on or after January 1, 2025 will have 30 days to file their beneficial ownership information. We will continue to monitor any further developments.
For more information on the Corporate Transparency Act, please click here.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
Join Our Mailing List
Stay up to date with the latest insights, events, and more
