The new requirements for businesses to file Beneficial Ownership Interest Reports (“BOIRs”) have followed a winding path. As readers of this Alert know, the Corporate Transparency Act (“CTA”) mandated that businesses formed before 2024 were required to file a BOIR no later than January 1, 2025. However, on December 3, the Eastern District of Texas in its appellate review of Texas Top Cop Shop, Inc. v. Garland, issued a nationwide preliminary injunction barring enforcement of the BOIR reporting obligation. Additional details on this injunction order can be found in our previous client alert. This order effectively paused the January 1, 2025, deadline until further notice. The U.S. Government promptly appealed to the U.S. Court of Appeals for the Fifth Circuit and the Fifth Circuit agreed to provide an expedited response in light of the proximity to the enjoined deadline.
Fifth Circuit’s Order
In response to Eastern District of Texas’ decision, the Fifth Circuit granted the U.S. Government’s motion staying the preliminary injunction pending further appeal, thereby reinstating the January 1, 2025 deadline for those businesses formed or registered before January 1, 2024. As a result of the Fifth Circuit’s order, all non-exempt entities are once again required to comply with its BOI reporting requirements by the stated deadline. The Fifth Circuit further provided that no extensions or additional time will be granted for compliance with the deadline.
FinCEN Response
Notwithstanding the Fifth Circuit’s order, the CTA’s enforcement arm, the Financial Crimes Enforcement Network (“FinCEN”), graced business owners with a dose of some holiday spirit by extending the January 1, 2025, deadline until January 13, 2025, to file their initial BOIR “recogniz[ing] that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect.”
Moreover, FinCEN is permitting reporting companies formed on or after September 4, 2024, but before December 3, 2024, to file its BOIR until January 13, 2025, as well.
Lastly, reporting companies formed between December 3, 2024, and December 23, 2024, have been granted an additional 21 days to file from the original filing deadline.
Entities must ensure compliance with the CTA and BOI reporting requirements by the foregoing stated deadlines and the otherwise non-affected deadlines. Failure to comply may result in significant penalties.
Leech Tishman advises prompt action to ensure timely compliance with this deadline and the avoidance of any penalties. We continue to closely monitor this issue and will update clients should new developments occur.