On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a stay on the nationwide injunction issued by the U.S. District Court for the Eastern District of Texas on the requirement for businesses (“reporting companies”) to report certain Business Ownership Information (BOI) to the U. S. Treasury’s Financial Crimes Enforcement Network (FinCEN). Then on December 26, the Fifth Circuit reversed itself, saying it was reinstating the injunction “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” As such, the matter goes to a panel of judges (merits panel) who will decide the appeal.
You can learn more about the BOI reporting requirement on the HBK website at https://hbkcpa.com/insights/what-is-the-beneficial-ownership-information-reporting-requirement/.
If the merits panel reinstates the obligation for companies to comply with the Corporate Transparency Act’s (CTA’s) Beneficial Ownership Information (BOI) reporting mandate, the following guidance from FinCEN, issued upon the Fifth Circuit December 23 stay, would extend the January 1, 2025 compliance deadline, in most cases until January 13, 2025.
According to the FinCEN update:
- 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.
HBK is not a law firm and cannot provide legal advice to clients. We encourage business owners to consult with your attorneys regarding their CTA reporting requirements
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