CTA Reporting Requirements Are Back

• 12.24.2024

By: C. S. Avery Reaves and Jonathan Wolfman

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted the government’s emergency motion in the Texas Top Cop Shop matter to stay the injunctive relief from Corporate Transparency Act (“CTA”) filing obligations granted earlier this month by Judge Mazzant of the U.S. District Court for the Eastern District of Texas. As a result, the beneficial ownership information (“BOI”) reporting requirements of the CTA are now back in effect.

In response to the Fifth Circuit’s order, the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury (“FinCEN”), issued a statement affirming that reporting requirements have sprung back into effect and granting certain extensions for initial BOI filings. Based on our reading of FinCEN’s guidance published on December 23, 2024, the revised filing deadlines are as follows:

(1) FinCEN’s initial guidance distinguishes entities created or registered to do business during this timeframe with initial filing deadlines on or before December 23, 2024, from those with later initial filing deadlines. Entities with such later deadlines—those created between September 25, 2024 and December 2, 2024—should take note of this inconsistency in relief currently granted. 

(2) FinCEN further noted that those reporting companies qualifying for disaster relief may have extended deadlines and that the named plaintiffs in National Small Business United v. Yellen (N.D. Ala.) may continue to avail themselves of injunctive relief granted in that case during the pendency of the ongoing appeal of National Small Business United to the U.S. Court of Appeals for the Eleventh Circuit.

All reporting companies that have previously made an initial beneficial ownership filing are again required to update any changes to information included in the report within 30 days of the underlying change.

In the Texas Top Cop Shop matter, the Fifth Circuit panel further ordered the government’s appeal of a hearing on the merits of the District Court’s injunctive relief be expedited and calendared as soon as practicable. In support of its orders, in marked contrast to the District Court’s assertion that the CTA was “likely unconstitutional,” the Fifth Circuit panel noted the government “made a strong showing that it is likely to succeed” in defending the constitutionality of the CTA.

The Fifth Circuit will now empanel a separate group of judges to hold briefings and hear arguments regarding the merits of the injunctive relief. Given the Fifth Circuit calendar, the earliest we currently expect the panel to hear arguments in this matter is the first full week of January. If the Fifth Circuit does not believe there is sufficient time for all parties to prepare for the early January window, its consideration of the matter could be pushed into February.

At this time, it appears unlikely that reporting companies will receive additional injunctive relief in the Texas Top Cop Shop matter or other litigation we are currently tracking prior to the revised January 13, 2025, reporting deadlines applicable to pre-2024 reporting companies. Efforts to provide statutory relief have also recently fallen short. As a result, reporting companies should finalize their preparation of any reports required under the CTA and commence filings in accordance with the revised deadlines as applicable.