Month: December 2024

Late last night, December 26, 2024, a Fifth Circuit Panel has reinstated the nationwide injunction blocking the enforcement of the Corporate Transparency Act (the “CTA”). In the order, the Court stated that “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel ordering granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the reporting rule is vacated.”

Why This Matters: Earlier this week, the FinCEN announced an extension of the filing requirements to January 13, 2025. However, once again, the enforcement of the CTA is no longer required.

This situation is rapidly evolving. We anticipate this case may end up in the United States Supreme Court’s hands. We will continue to review and monitor the situation and keep you apprised of the latest developments. Please feel free to reach out to Rich Bar (rbar@gkglaw.com) or Frank Beninato (fbeninato@gkglaw.com) if you have any questions.

Yesterday afternoon, December 23, 2024, we learned that the United States Court of Appeals for the Fifth Circuit revived the immediate enforceability of the Corporate Transparency Act (CTA). The Fifth Circuit’s decision stayed the preliminary injunction issued on December 3, 2024, and allows the federal government to continue enforcing the CTA while litigation in Texas Top Cop Shop, Inc., et al. v. Garland, et al. continues.

Following the ruling, FinCEN announced an extension of the filing deadline to January 13, 2025 (from January 1, 2025). Reporting Companies that are created or registered on or after January 1, 2025, have thirty (30) days to file their BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

Why This Matters: Compliance with the CTA is again required. Existing Reporting Companies are now required to file their BOI reports by January 13, 2025. Reporting Companies that are created after January 1, 2025, have thirty (30) days after creation to comply with the BOI. Even though an extension was granted, the deadline is quickly approaching. It is imperative to confirm your filing requirements (if any) and do so timely to avoid any fines and penalties.

This situation is rapidly evolving. We anticipate the challengers in this suit to seek further review from the Fifth Circuit or the United States Supreme Court. We will continue to review and monitor the situation and keep you apprised of the latest developments. Please feel free to reach out to Rich Bar (rbar@gkglaw.com) or Frank Beninato (fbeninato@gkglaw.com) if you have any questions.

Following last week’s enjoinment of the Corporate Transparency Act (CTA), the Financial Crimes Enforcement Network (FinCEN) has announced that 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. Reporting companies may, however, continue to voluntarily submit beneficial ownership information reports should they so desire.

Why This Matters: While the litigation is ongoing, FinCEN has stated it will comply with the federal court order for as long as it remains in effect, and compliance with the January 1, 2025 deadline proscribed in the CTA is not required.

As always, we will continue to review and monitor the situation and keep you apprised of the latest developments. Please feel free to reach out to us in the meantime if you have any questions.

Late Tuesday afternoon (December 3, 2024), we learned that the U.S. District Court in Texas has enjoined the enforcement of the Corporate Transparency Act (the “CTA”) in part due to the question of whether the CTA is constitutional and beyond the powers instilled to Congress. For reference, this was decided in a case titled Texas Top Cop Shop, Inc. v. Merick Garland, Civil Action No. 4:24-CV-478, E.D., Texas.

Why This Matters: Under the ruling, Reporting Companies with a reporting deadline of January 1, 2025 no longer have to file a Beneficial Owner Information report. It is likely that the government will challenge this ruling. However, at this time, compliance with the January 1, 2025 deadline proscribed in the CTA is not required.

We will continue to review and monitor this situation. Please feel free to reach out to Rich Bar (rbar@gkglaw.com) or Frank Beninato, III (fbeninato@gkglaw.com) in the meantime if you have any questions.

Rich Bar and Frank Beninato, III
GKG Law