There have been some significant developments on the Beneficial Ownership Information (BOI) reporting requirements over the last week. The latest updates are in bold below.
**December 27th update. FinCEN issued the following alert on their website. “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.“
**On December 26th 2024, an order was issued by the Fifth Circuit Merits Panel vacating a previous stay that had been granted regarding the enforcement of the Corporate Transparency Act (CTA) and its corresponding Reporting Rule.
On December 23rd 2024, a three-judge panel of the Fifth Circuit Court of Appeals granted a stay of the district court’s preliminary injunction which had previously halted the Corporate Transparency Act (CTA).
As we previously reported, on December 3rd 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the U.S. Government from enforcing the CTA’s Beneficial Ownership Information reporting requirements nationwide.
The Fifth Circuit Court of Appeals ruling on December 23rd stays the preliminary injunction allowing the U.S Government to continue enforcement of the BOI reporting requirements while the case makes its way through the appeals process.
Following the Fifth Circuit’s stay of the injunction against the CTA, FinCEN extended the reporting deadlines for BOI reporting. These extensions were implemented because the Department of the Treasury recognized that companies might need additional time to comply due to the period when the preliminary injunction was in effect.
The extensions are as follows:
- Companies created or registered before January 1, 2024, now have until January 13, 2025, to file their initial beneficial ownership information reports. These companies would have originally had a deadline of January 1, 2025.
- 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, also have until January 13, 2025, to file their initial reports.
- Companies created or registered in the United States between December 3, 2024, and December 23, 2024, have an additional 21 days from their original filing deadline to file their initial reports.
- Companies that qualify for disaster relief may have deadlines extended beyond January 13, 2025. These companies should follow whichever deadline is later.
- Companies created or registered in the United States on or after January 1, 2025, have 30 days to file their initial reports after receiving notice that their creation or registration is effective.
In response to the Fifth Circuit Court of Appeals ruling, the plaintiffs in the case Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al. are requesting an emergency rehearing en banc, which means that they are requesting that the entire appellate court panel consisting of all active judges re-examine the decision that was decided by a smaller panel of judges. The plaintiff states that the request is based on several arguments related to the panel decision to grant a stay of the district court’s preliminary injunction. The plaintiffs contend that the panel decision conflicts with Supreme Court precedent, improperly weighed the equities, and failed to consider key aspects of the case. They have requested a decision to be made by the full appellate court panel by January 6th 2025.
What does this all mean? Companies should be prepared to file their BOI report with FinCEN by the extension dates issued by the government while this all plays out in court. We will keep you updated on any further developments.
If you want to learn more about the BOI reporting requirements, please see our post below regarding the Corporate Transparency Act.