Fifth Circuit Stays Nationwide Preliminary Injunction of CTA and Reinstates Beneficial Ownership Information Reporting
On December 23, 2024, in Texas Top Cop Shop v. Garland et al., the Fifth Circuit Court of Appeals ordered a stay (pending appeal) of the nationwide preliminary injunction against enforcement of the Corporate Transparency Act (the “CTA”)[1] issued on December 3, 2024 by the U.S. District Court for the Eastern District of Texas. The appeals court found that the government is likely to succeed on the merits regarding the constitutionality of the CTA, that the injunction inflicts irreparable harm to the government, and that the public interest in combating financial crime and protecting national security outweighs the harm to the businesses challenging the CTA, which the appeals court found to be minimal.[2]
As a result of the appeals court ruling, the CTA and its implementing regulations are reinstated and once again in effect. Following the ruling, FinCEN issued a public notice announcing the reinstatement of the CTA with amended filing deadlines to allow reporting companies additional time to file their beneficial ownership information report (“BOIR”) to FinCEN. The new filing deadlines are as follows:
Reporting companies created or registered before January 1, 2024 have until January 13, 2025 to file their BOIR.
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 their BOIR.
Reporting companies created or registered between and including December 3, 2024 and December 23, 2024 have an additional 21 days from their original filing deadline to file their BOIR.
Reporting companies created or registered on or after January 1, 2025 will continue to have 30 days to file, as originally provided in the CTA.[1]
In light of the appeals court’s order, reporting companies that have not yet filed their BOIR should immediately begin or resume preparation of their BOIR filing and avoid potential penalties for non-compliance with the CTA, which are significant.
PierFerd will continue observing developments regarding the CTA. For additional information, please contact Ahpaly Coradin at ahpaly.coradin@pierferd.com or your regular PierFerd contact for assistance.
This publication and/or any linked publications herein do not constitute legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, the author(s) and PierFerd assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, this publication may constitute Attorney Advertising. © 2024 Pierson Ferdinand LLP.
[1] For more information on the CTA, see our previous client alerts The Corporate Transparency Act: Implications and Challenges for Foreign Companies and Foreign Owners — Pierson Ferdinand LLP; The Corporate Transparency Act: Implications and Challenges for US Companies and Owners — Pierson Ferdinand LLP; Texas District Court Enjoins Federal Government From Enforcing Corporate Transparency Act — Pierson Ferdinand LLP and FinCEN Suspends CTA Enforcement Following Preliminary Injunction By Texas District Court — Pierson Ferdinand LLP.
[2] https://drive.google.com/file/d/1k4Kn7ORnoBcmB_VG1Dw6Bl9I31E1De9j/view
