BOI Reporting – Recent U.S. District Court Ruling -12/23/24 UPDATE

On Tuesday, December 3, 2024, the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.). However, on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit stayed the district court’s preliminary injunction that had enjoined the Corporate Transparency Act (CTA) in this case, pending the resolution of the Department of the Treasury’s ongoing appeal. Texas Top Cop Shop is one of several cases challenging the CTA in courts across the country. Several district courts have denied requests to block the CTA, ruling in favor of the Department of the Treasury. The government maintains, in line with the U.S. District Courts for the Eastern District of Virginia and the District of Oregon, that the CTA is constitutional. Consequently, on December 5, 2024, the Department of Justice, representing the Department of the Treasury, filed a Notice of Appeal and separately sought a stay of the injunction, both with the district court and the Fifth Circuit Court of Appeals.

As a result of the December 23, 2024, decision by the Fifth Circuit Court of Appeals, reporting companies—except as noted below—are once again required to file their beneficial ownership information with FinCEN. However, recognizing that reporting companies may need additional time to comply due to the period the preliminary injunction was in effect, the Department of the Treasury has extended the reporting deadlines as follows:

• Reporting companies created or registered before January 1, 2024, now have until January 13, 2025, to submit their initial beneficial ownership information reports with FinCEN. (These companies were originally required to report by January 1, 2025.)
• Reporting companies created or registered in the U.S. on or after September 4, 2024, that had a filing deadline between December 3, 2024, and December 23, 2024, now have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies created or registered in the U.S. between December 3, 2024, and December 23, 2024, are granted an additional 21 days from their original filing deadline to submit their initial beneficial ownership information reports with FinCEN.
• Reporting companies eligible for disaster relief may have extended deadlines beyond January 13, 2025. These companies should follow the later of the two deadlines.
• Reporting companies created or registered in the U.S. on or after January 1, 2025, will have 30 days to file their initial beneficial ownership information reports with FinCEN, starting from the date they receive actual or public notice of their creation or registration being effective.

As noted in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.),” plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—specifically, Isaac Winkles, any reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and its members as of March 1, 2024—are not currently required to report their beneficial ownership information to FinCEN.

For assistance or more information, please contact our CTA Support Team at [email protected].

This entry was posted on Tuesday, December 24th, 2024 at 9:08 am and is filed under Corporate/LLC Compliance, Small Business News, Starting A Business. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.