Down to the wire, requirements under the CTA should not be a continued source of confusion for Small-Business owners.
LATE NIGHT CTA BREAKING NEWS | A last minute order from the Fifth Circuit has vacated an order granting a stay of the district court’s preliminary injunction barring the government from enforcing the Corporate Transparency Act (CTA).
A stay is a usually temporary court order that stops a legal proceeding.
In other words, the Financial Crimes and Enforcement Network (FinCEN) under Treasury has once again been enjoined from enforcing the beneficial ownership information (BOI) reporting requirements under the CTA.
Causing additional confusion for Small-Business owners regarding compliance with BOI definitions and CTA reporting, there have been several changes by the court, as well as attempted action by Congress, right before the initial major Jan. 1, 2025, deadline for entities formed before 2024.
For some clarity on these confusing, last-minute changes related to the CTA:
Dec. 3, 2024 | A District Court in Texas issues nationwide CTA injunction
Dec. 17, 2024 | House proposes one-year CTA Delay in CR, which ultimately does not receive a vote
Dec. 22, 2024 | The Nationwide CTA injunction falls after it is rescinded on appeal
Dec. 23, 2024, the Fifth Circuit granted an emergency motion filed by the government to stay (cancel) the preliminary nationwide injunction
Dec. 23, 2024, FinCEN extends BOI filing deadline for certain small businesses to Jan. 13, 2025.
Dec. 26, 2024 | An order from the Fifth Circuit reversed an earlier ruling granting a stay over the nationwide injunction
At this time, the latest action from the court means the nationwide injunction over the CTA is back on, with the original district court injunction barring FinCEN from enforcing the BOI reporting requirements remaining in force.
Should the injunction fall again, the dates under the FinCEN extensions should not be impacted - see below.
Details from FinCEN about their NEW extended CTA deadlines:
Under the law as written, a reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial report. This is true even if the company was created years before 2024. That deadline has been extended to January 13, 2025.
A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company's creation or registration to file its initial report. However, under the relief granted by FinCEN, reporting companies created or registered on or after September 4, 2024, with a filing deadline between December 3, 2024 and December 23, 2024 now have until January 13, 2025 to file. Additionally, reporting companies created or registered on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days to file.
Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. According to FinCEN, these companies should abide by whichever deadline falls later.
FinCEN also confirmed plaintiffs in National Small Business United v. Yellen, including Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association as of March 1, 2024, are not currently required to report their beneficial ownership information to FinCEN at this time.
In addition to reinstatement of the nationwide injunction over the CTA, NSBA’s separate case over this unconstitutional law remains pending, with the original exemption for certain NSBA members still in place.
This is a developing matter. Follow NSBA as we continue closely tracking changes to the CTA alongside our fight to fully repeal this cumbersome law.