By: Amanda Messa, General Counsel, LEMOINE
UPDATE: The Holiday Fun Continues….For Now
Just when we thought all hope for a peaceful beginning to
2025 was lost….a different Fifth Circuit panel has come to the rescue – On
December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit entered an
order that has the effect of again prohibiting the enforcement of the Corporate
Transparency Act (CTA) and staying all CTA filing deadlines. As part of
its ruling, the Fifth Circuit panel said it was taking such action in order to
preserve the constitutional status quo while the court considers the parties’
substantive arguments in an expedited appeal. The Fifth Circuit has
issued an expedited briefing schedule and oral argument is currently scheduled
for March 25, 2025.
Stay tuned for further litigation developments – and make
sure you’ve gathered the information required to file if the injunction is once
again lifted.
ORIGINAL POST: In early December, we were given what many
viewed was an early Christmas present from the U.S. District Court for the
Eastern District of Texas – a beautiful and shiny nationwide preliminary
injunction halting ALL deadlines and filing requirements under the Corporate
Transparency Act ("CTA"). In the weeks following the issuance
of the injunction, you could almost hear the joy of in-house lawyers as they
sighed a sigh of relief and scratched that item from their long and
never-ending to do lists. Unfortunately, the holiday story doesn’t end
there. Much to the chagrin of many business owners and certainly some
in-house lawyers too, on December 23, 2024, the U.S. Court of Appeals for the
Fifth Circuit got an idea – an awful idea – when the Court granted a stay of
the preliminary injunction enjoining the CTA entered in the case of Texas
Top Cop Shop, Inc. v. Garland.
As it currently stands, in addition to our other
responsibilities in the New Year, it appears we will need to get back to
analyzing the 23 exemptions under the CTA to determine if a filing will be
required for our reporting companies in early January 2025.
Below is a summary of the revised deadlines as posted on
FinCEN’s website:
- 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.
The legal battles and holiday fun surrounding the CTA are
not over. As a result, we will all need to continue to monitor for
additional updates and guidance from FinCEN or a superseding order from the
courts as a result of the ongoing litigation. One final (and hopefully
helpful) holiday tip – FinCEN has developed a fairly comprehensive Frequently
Asked Questions page that is a good resource as you run into questions related
to these filings:
Happy Holidays!