Fifth Circuit Lifts Injunction Blocking Corporate Transparency Act

FinCEN offers modest extension to filing deadlines

On Monday, December 23, a Fifth Circuit appellate court lifted the nationwide preliminary injunction blocking FinCEN from enforcing the Corporate Transparency Act (CTA) and its implementing regulations. The CTA, which took effect January 1, 2024, requires most legal entities to electronically report beneficial ownership information by January 1, 2025 (unless an exemption applies). Shortly after the decision was handed down, FinCEN issued a statement confirming that reporting companies are again required to file beneficial ownership information with FinCEN, with certain extensions to the reporting deadlines (as discussed below).

On December 3, 2024, the district court in Texas Top Cop Shop, Inc. v. Garland, E.D. Tex., No. 4:24-cv-00478 preliminarily blocked the reporting requirements and the pending deadline, agreeing with the plaintiffs’ argument that the CTA falls outside Congress’ powers to regulate interstate commerce because it seeks to regulate all entities regardless of whether they engage in commercial activity. However, on December 23, a three-judge federal appeals court panel lifted the injunction, finding that the U.S. Department of Justice “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.”

In light of the Fifth Circuit’s decision, FinCEN announced the following extensions to the reporting deadlines to file initial beneficial ownership information reports with FinCEN: 

• Reporting companies created or registered before January 1, 2024 – reporting deadline of January 13, 2025 (would 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 – reporting deadline of January 13, 2025.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 – reporting deadline is extended an additional 21 days from their original filing deadline.
• Reporting companies created or registered in the United States on or after January 1, 2025 – reporting deadline 30 days after receiving actual or public notice that their creation or registration is effective.

Additionally, reporting companies that qualify for disaster relief may have extended deadlines after January 13, 2025. These companies should comply with the later deadline. 

We will continue to monitor the situation and notify you of any relevant updates.