Federal Court of Appeals Reinstates Corporate Transparency Act (“CTA”) Injunction

Note: This blog provides important information on the Corporate Transparency Act (CTA) compliance; however, a more up-to-date analysis is available. For the latest updates and insights, please refer to our most recent blog.

UPDATE: On December 26, a federal court of appeals officially reinstated an injunction blocking the reporting deadline for Beneficial Ownership Information (BOI). This came just days after a panel lifted the injunction. This latest development means that the government cannot enforce the CTA and BOI reporting requirements and small businesses are under no obligation to file these reports while the court decides the case. Though small business owners should remain ready to file BOI reports, they do not have to submit reports. The injunction will remain in place while our lawsuit proceeds or until the court says otherwise.

On December 23, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced extended filing deadlines for the Corporate Transparency Act (CTA) after a federal appeals court ruled that a nationwide order blocking the Act’s beneficial ownership reporting requirements was unwarranted.

Entities created or registered before 2024 now have until January 13, 2025, to submit their filings. This decision follows a review by the 5th U.S. Circuit Court of Appeals (three-judge panel) of a December 3 ruling by a Texas federal district court, which had temporarily halted enforcement of the CTA’s reporting requirements. The appeals court reversed the lower court’s injunction, indicating the government’s position provides the likelihood to succeed on the merits of the CTA’s constitutionality.

This ruling marks the latest development in ongoing litigation and legislative debates surrounding the CTA as businesses prepare to comply with the law’s requirements. Approximately 32.6 million entities initially faced a January 1, 2025, deadline to report their beneficial ownership information.

In response to the appeals court’s decision, FinCEN updated its Beneficial Ownership Information webpage with new filing deadlines, offering limited extensions:

• Entities created or registered before 2024: Deadline extended to January 13, 2025
• Entities created or registered between September 4 and December 3, 2024, with deadlines falling between December 3 and December 23, 2024: Deadline extended to January 13, 2025
• Entities created or registered between December 3 and December 23, 2024: Granted a 21-day extension from their original deadline
• Entities created or registered on or after January 1, 2025: Filing required within 30 days after notification of creation or registration

FinCEN also clarified that entities qualifying for disaster relief may receive additional deadline extensions beyond January 13, 2025.

Separately, named plaintiffs and National Small Business Association members are temporarily exempt from reporting their beneficial ownership information pending a ruling by the 11th Circuit in their ongoing case.

McGuire Sponsel’s Global Business Services team will continue to monitor this ever-changing situation and provide periodic updates