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On December 23, 2024, the Fifth Circuit overturned the Texas District Court’s nationwide injunction regarding the Corporate Transparency Act (“CTA”). Therefore, Reporting Companies, as defined in the CTA, are now required to report.

Given the Fifth Circuit ruling, FinCEN has posted updated guidance regarding filing deadlines:

  • Reporting Companies that were created or registered prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. These companies would otherwise 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, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
  • Reporting Companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
  • Reporting Companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
  • Reporting Companies that are created or registered in the United States on or after January 1, 2025, have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

Just three weeks ago, Judge Amos L. Mazzant III, of the U.S. District Court for the Eastern District of Texas, granted a nationwide preliminary injunction to temporarily block the enforcement of the CTA, ruling the act unconstitutional. The opinion was published on Dec. 3 in Texas Top Cop Shop, Inc. v. Garland (E.D. Tex., No. 4:24-cv-00478).

It was the second time this year that a district court ruled the CTA unconstitutional as on March 1, 2024, the Northern District of Alabama Northeastern Division, in National Small Business United v. Yellen, No. 5:22-cv-1448 (N.D. Ala.), ruled the CTA unconstitutional. However, the holding only applied to the plaintiffs in the Alabama federal case.

CTA is Reinstated; The Time to File is Now

The CTA is a federal law that requires businesses to disclose and report information about their owners and controllers to FinCEN. It was enacted by Congress in 2021 as an expansion of the anti-money laundering laws, intended to prevent terrorist financing, corruption, tax fraud, and other illicit activity. It went into effect on Jan. 1, 2024.

As we stated in our most recent CTA client alert, the Dec. 3, 2024, the ruling was only temporary and would be appealed. Now, with the Fifth Circuit ruling, the CTA is back as originally planned.

If you have already reported your Beneficial Ownership Information (BOI) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), then that’s great news. If you have not yet filed, the time to file is now. FinCEN has set up the BOI E-Filing system at: https://boiefiling.fincen.gov/.

Adams and Reese will continue to monitor all further court rulings and news from FinCEN. For more information and detailed guidance, businesses are encouraged to consult with legal or tax professionals or visit the FinCEN website.

About Our Authors

Sean Buckley is a corporate services attorney in the Adams and Reese Houston office. Sean advises clients on a wide array of corporate matters, including the purchase and sale of equity and assets, and in a diverse array of industries, including real estate transactions, entity selection and formation, corporate governance, and franchise opportunity matters.

Brian Smithweck is a corporate services attorney in the Adams and Reese Mobile office. Brian practices in the areas of corporate, partnership and limited liability company planning, estate planning, probate, trusts and estates, M&A, tax planning and tax controversies. He represents businesses, individuals and families. He has a Master of Laws in Taxation.

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