Fifth Circuit Reinstates Stay on Ownership Reporting - Deadline Lifted

On December 26, 2024, the Fifth Circuit reinstated a stay of the Corporate Transparency Act’s requirement that businesses must file Beneficial Ownership Information reports. Accordingly, there is at present no obligation to file, and FinCEN is not permitted to pursue enforcement action against companies that fail to file by the revised deadlines.

This most recent stay order is a reversal of an earlier order that would have allowed FinCEN to enforce a January 13, 2025 deadline for most reports. A separate panel of judges reviewing the merits of the case reinstated the stay “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.”

The process is not over, though, and the situation may change yet again. Yesterday, the Department of Justice filed an application to the Supreme Court to lift the stay. The Supreme Court is not obligated to respond to the application or issue any decision within any particular timeframe. In the meantime, the Fifth Circuit is proceeding to hear the merits of the appeal on an expedited schedule and scheduled oral argument for March 25, 2025.

Recommendation

While the reinstatement of the stay has relieved companies of the filing deadlines, it is prudent for any client that has registered a company with any state’s office of the Secretary of State to review the filing requirements and the information needed to complete it. FinCEN’s web page for the filing requirement can be found here and the e-filing portal can be found here.

If you have questions regarding the CTA’s BOI compliance and reporting obligations, please contact one of our attorneys.