By: John Fuchs, Rachel Sterbenz, and Tate Thompson

As we initially reported, the Corporate Transparency Act (“CTA”) took effect on January 1, 2024, requiring Reporting Companies (as defined by the CTA) to file beneficial ownership information reports (“BOIRs”) with the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”).  Throughout 2024, multiple plaintiffs challenged the constitutionality and enforceability of the CTA in federal courts across the nation. On December 3, 2024, in Texas Top Cop Shop, the U.S. District Court for the Eastern District of Texas declared the CTA “likely unconstitutional” and issued a nationwide preliminary injunction halting its enforcement. 

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By: John Fuchs, Rachel Sterbenz, Nida Rais, and Tate Thompson

This Client Alert provides latest information in what continues to be the most unexciting developing news story any of us has ever followed. As the saying goes, “Don’t shoot the messenger!” Long story short / TLDR (too long didn’t read), the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) issued an order on December 26, 2024, which effectively reinstates the preliminary injunction against the enforcement of the Corporate Transparency Act (“CTA”), and once again, it is voluntary for a Reporting Company (as defined by the CTA) to file beneficial ownership information reports (“BOIRs”) with the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”). As we have mentioned in our prior Client Alerts linked below, this is not a final decision on the constitutionality of the CTA, and businesses should be aware that the reporting deadlines could be reinstated if the most recent order is overturned or a permanent injunction is not awarded on the merits of the Fifth Circuit case mentioned below.

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By: John Fuchs, Rachel Sterbenz, Nida Rais, and Tate Thompson

As we previously reported, on December 3, 2024, in Texas Top Cop Shop, Inc. v. Garland, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the Corporate Transparency Act (“CTA”), pausing the requirement for a Reporting Company (as defined by the CTA) to file beneficial ownership information reports (“BOIRs”).  However, on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued an order lifting the preliminary injunction, effectively reinstating the CTA and a Reporting Company’s obligation to file BOIRs.  A few hours after the Fifth Circuit issued the order, the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published limited extensions to the initial reporting deadlines for many Reporting Companies.  In particular, Reporting Companies formed before January 1, 2024, are now required to file BOIRs by January 13, 2025 (instead of January 1, 2025).

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By: John Fuchs, Rachel Sterbenz, Nida Rais, and Tate Thompson

As previously reported, the Corporate Transparency Act (“CTA”) took effect on January 1, 2024, requiring many businesses to file a beneficial ownership information report (“BOIR”), including general information about the company and sensitive personal information of its “company applicants” and “beneficial owners.”  Under the CTA, companies formed prior to 2024 have until January 1, 2025, to submit their initial BOIR; and entities formed during 2024 have only 90 days after the date of formation to submit an initial BOIR.  Any “willful” failure to comply with the CTA gives the Financial Crimes Enforcement Network (“FinCEN”) the authority to impose significant civil and criminal penalties.

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