Corporate Transparency Act Deadlines Extended: What Businesses Must Know

The nationwide injunction against enforcement of the Corporate Transparency Act (“CTA”) and its beneficial ownership information (“BOI”) reporting rule under 31 CFR 1010.380 (the “Rule”) has been stayed pending appeal, and the case expedited to the next available oral argument panel.

On Dec. 23, the Fifth Circuit Court of Appeals issued an order in the case of Texas Top Cop Shop, et al. v. Garland et al. staying the lower court’s nationwide preliminary injunction, which had previously brought reporting compliance to a screeching halt. The Financial Crimes Enforcement Network (“FinCEN”) had previously agreed to comply with this injunction for as long as it was in effect. Later in the day, with surprising speed, FinCEN not only acknowledged that BOI reporting requirements are back in effect (except for companies and individuals otherwise excepted pursuant to National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)), but also announced deadline extensions:

• Reporting companies created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN.
• Reporting companies created or registered in the U.S. 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 BOI reports with FinCEN.
• Reporting companies created or registered in the U.S. 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 BOI reports with FinCEN.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025, in which case they should abide by whichever deadline falls later.

Reporting companies created or registered in the U.S. on or after January 1, 2025 still have only 30 days to file their initial BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

Analyzing the Court’s Decision

Interestingly, the Court’s order criticized the plaintiffs’ argument that overturning the nationwide injunction now would provide insufficient time for reporting compliance despite reporting companies only losing 20 days after having years of notice.[1] As such, FinCEN’s grant of such limited extensions may be seen as a nod to the logistical limitations of reporting companies, or alternatively as a retort to the plaintiffs.

Although there are numerous judicial challenges to the CTA and its Rule, and a recent funding bill proposed in Congress would have extended the CTA reporting deadline to 2026, those other challenges have not progressed as far as Texas Top Cop Shop, and the funding bill failed to pass. Indeed, an alternate funding bill that did not include changes to the CTA deadlines was passed and signed into law over this past weekend instead.[2]

Reporting companies, their beneficial owners, and those individuals exercising substantial control (such as, but not limited to, senior officers) should take all steps necessary to finish gathering any remaining BOI reporting information and file their reports. With a new Congress taking their seats in early January, FinCEN’s deadline extensions may provide a window for legislative action, or further litigation. That said, further delay in filing risks running out of time.

Analyzing the Limits of FinCEN’s Extensions

Please note that FinCEN’s extensions mostly concern the filing deadlines for initial BOI reports (which are due under 31 CFR 1010.380(a)(1)), not updated or corrected reports (which are due under 31 CFR 1010.380(a)(2) and (a)(3), respectively). Thus, the 30 calendar day deadlines for these reports would appear to still be in effect without extension. Furthermore, FinCEN’s extension for “Reporting companies created or registered … on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025” would seem to mean that those reporting companies which owed initial BOI reports on December 24th or thereafter under the 90-day filing requirement of 31 CFR 1010.380(a)(1)(i)(A) do not benefit from this extension. Reporting companies should thus be careful to take necessary action in case they fall into this latter category or if they must update or correct existing BOI reports.

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[1] Order filed December 23, 2024 in Texas Top Cop Shop, Inc. et al. v. Garland, et al., No. 24-40792, p. 7 n 7 (5^th Circuit) (“The Businesses warn that lifting the district court’s injunction days before the compliance deadline would place an undue burden on them. They fail to note, however, that they only filed suit in May 2024 and the district court’s preliminary injunction has only been in place for less than three weeks as compared to the nearly four years that the Businesses have had to prepare since Congress enacted the CTA, as well as the year since FinCEN announced the reporting deadline.”).

[2] See Public Law No: 118-158; H.R. 10545.