Corporate Transparency Act/Beneficial Ownership Reporting New Update.

December 25, 2024 Brian K. Fullmer Jeremy Jarrett Michael W. Margrave Steven M. Goldstein Business & Corporate Law

In the ongoing saga over the on-again, off-again Corporate Transparency Act, it is off again.  On December 26, the 5th Circuit Court of Appeals reinstated the nationwide stay of the Act previously issued by the U.S. District Court for the Eastern District of Texas.  A panel of the 5th Circuit is taking up the case on an expedited basis for a decision on the constitutionality of the Act, but the 5th Circuit has agreed with the District Court that its enforcement should be stayed pending that decision.  Thus, once again, all reporting requirements under the Act are on hold, including reporting for non-exempt existing entities by January 13, 2025 (the new deadline established by FinCen when the District Court’s stay was briefly lifted).

Sacks Tierney will continue to monitor this situation.  If you have any questions, please feel free to contact any of the lawyers on our CTA team.

On December 23, 2024 the Fifth Circuit Court of Appeals issued an Order lifting the nationwide stay of the Corporate Transparency Act’s beneficial ownership reporting requirement.   The stay,  previously issued by the Federal District Court for the Eastern District of Texas, paused the requirement for all non-exempt entities to report their beneficial ownership to FinCen.  Notably,  the Fifth Circuit’s decision did not extend any of the existing deadlines under the Act, but later in the day, FinCen extended and clarified the deadlines as follows:

  • Reporting entities in existence prior to January 1, 2024 now have until January 13, 2025 to report (previous deadline was December 31, 2024).
  • Reporting entities formed on or after September 4, 2024 now have different deadlines for reporting, depending on when they were formed and if their deadline for reporting fell during the time when the Act was stayed (previous deadline was 90 days after formation). 
  • Reporting entities formed on or after January 1, 2025 have 30 days after formation to report (the 90 day window does not apply to those entities).

This situation remains fluid and there may be more appeals in the Texas lawsuit that generated the nationwide stay.  The CTA team at Sacks Tierney continues to monitor the situation and will promptly provide updates if circumstances change.

In light of this ruling, we recommend that all clients resume the beneficial reporting process in order to meet the January 13, 2025 deadline. If you have any questions, please reach out to any of the attorneys on our CTA team.

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