The Corporate Transparency Act: Reporting Obligations Reinstated

The Corporate Transparency Act (CTA) requires a broad class of legal entities (referred to as “reporting companies”) to identify and report beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

U.S. District Court Judge Amos L. Mazzant temporarily halted the CTA’s enforcement on December 3, however, when he issued a preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al. (E.D. Tex., No. 4:24-cv-00478). Unlike prior court rulings regarding the CTA’s enforceability, Judge Mazzant’s order clearly enjoined enforcement nationwide and explicitly stayed the January 1, 2025, compliance deadline for reporting companies formed before January 1, 2024. But the U.S. Court of Appeals for the Fifth Circuit stayed Judge Mazzant’s preliminary injunction on Monday.

Non-exempt entities formed before January 1, 2024, would have had only nine days to file their initial Beneficial Ownership Information Report (BOIR) with FinCEN to comply with the original January 1, 2025, deadline. Fortunately, FinCEN extended the following deadlines for non-exempt entities under the CTA shortly after the stay was issued:

• The deadlines for non-exempt entities formed September 25–December 2, 2024, were not extended, so such entities are required to file within 90 days of their formations, ranging December 24, 2024, through March 3, 2025. Similarly, the original filing deadlines for entities formed after December 23, 2024, remain unchanged. Non-exempt entities formed December 23–31, 2024, must file within 90 days of their formation, and non-exempt entities formed on or after January 1, 2025, must file within 30 days of their formation.

FinCEN has not provided explicit guidance for entities that were required to file updates to previously filed BOIRs during the period of the injunction. Under the CTA, entities must report any updates to previously filed information within 30 days. We recommend entities who missed this 30-day filing deadline file promptly.

We expect further developments regarding this case and other cases pending throughout the country. In this case there may be an appeal by the company plaintiffs to restore the preliminary injunction, or ultimately, a decision by the court on the merits of the case (as well as resolution of any subsequent appeals from that decision).

While the CTA’s ultimate enforceability remains uncertain, we encourage you to learn more about the Corporate Transparency Act and consult experienced counsel with questions you may have. Fenwick will continue to monitor further developments.

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