Just before the holidays, on December 23rd, 2024, the Fifth Circuit Court unanimously ruled in favour of the government’s request to keep enforcing the Corporate Transparency Act (CTA). This 3-week old decision overturned a nationwide injunction that had stopped the government from requiring companies to file Beneficial Ownership Information (BOI) reports.
The government submitted an urgent request to the U.S. Court of Appeals for the 5th Circuit, asking for an immediate pause, or “stay,” on a lower court’s decision. The government explained that a stay was necessary because the law was passed in January 2021, but the lawsuit wasn’t filed until this year.
This delay caused the lower court’s decision to take effect just before a January 1, 2025, reporting deadline. The government also pointed out that this decision disrupted their efforts to gather the information they needed to enforce the law. On the other hand, the government argued that the impact on the plaintiffs would be small.
As an alternative, the government asked the court to either limit the lower court’s decision to only the companies named in the case or, at the very least, to members of the National Federation of Independent Business (NFIB).
On December 13, the court sped up the process, asking for final arguments by December 19. This timeline suggested that the court could issue a ruling soon after, reinstating the January 1, 2025, deadline for companies formed before January 1, 2024, to submit their Beneficial Ownership Information (BOI) reports.
After the ruling, FinCEN updated its website to extend the filing deadlines for companies except those that are exempt.
Under the original law, companies created or registered before January 1, 2024, had until January 1, 2025, to file their first BOI report, even if the company was formed years earlier. Now, that deadline has been extended to January 13, 2025.
For companies created or registered on or after January 1, 2024, and before January 1, 2025, the law gives 90 calendar days after their creation or registration to file their first report.
However, with FinCEN’s update, companies created or registered on or after September 4, 2024, with deadlines between December 3, 2024, and December 23, 2024, now have until January 13, 2025, to file. Companies created or registered between December 3, 2024, and December 23, 2024, are also given an extra 21 days to file.
Additionally, companies eligible for disaster relief may have deadlines beyond January 13, 2025. FinCEN advises these companies to follow whichever deadline is later.
Based on the last paragraph of the order, this situation is still in motion and evolving, and an “appeal will be expedited to the next available argument panel.”
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