CTA Beneficial Ownership Information Requirements No Longer Required

CTA Beneficial Ownership Information Requirements No Longer Required

Friday, December 27, 2024 - Another unexpected turn of events in the lawsuit regarding the Corporate Transparency Act (“CTA”). The case is Texas Top Cop Shop v. Garland, 5th Cir., No. 24-40792.

Late yesterday (12/26/24), the Fifth Circuit merits panel reinstituted the preliminary injunction against the enforcement of the CTA. Therefore, as of today (12/27/24), there is no requirement or deadline to file a company BOI report pursuant to the CTA.

Companies may still voluntarily file their BOI reports with FinCEN. But for the time being, they are not required to comply with the CTA reporting deadlines (neither the original January 1 deadline, nor the revised deadline of January 13). The ruling, however, is still not a final determination of the CTA’s constitutionality. Instead, it only temporarily halts deadlines while the case continues to proceed. This could potentially be appealed to the Supreme Court and further action is still required within the lower courts. All of which could once again change the deadlines and requirements in the future. Businesses should remain cautious and continue to understand that this recent pause may still only be temporary.

For those of you keeping score at home, this has been the head spinning turn of events this month:

• December 03, 2024: District Court in Texas suspends the deadlines for the CTA BOI reports.
• December 23, 2024: 5th Circuit Court of Appeals reinstates the January 1 deadline.
• December 23, 2024: FinCEN announces a new deadline of January 13 for the CTA BOI reports.
• December 26, 2024: 5th Circuit Court of Appeals, on second thought, decides that the suspension of the deadlines is the best course as the lawsuit continues to be litigated.

We continue to recognize this is very frustrating and likely confusing to all small businesses. A simple Google search right now of the “Corporate Transparency Act” will yield a long list of outdated information and incorrect information. We’ve seen news outlets, as recent as this morning, still providing outdated updates from the December 23rd court decision – that is now overruled.