Page 8 - LRCC February 2025 Focus

Ask the Expert Series

Corporate Transparency Act Updates from

Fahey Schultz Burzych Rhodes PLC

By Mark Burzych, Fahey Schultz Burzych Rhodes

Q: There was so much activity
surrounding the Corporate
Transparency Act at the end of the
year 2024 that I could not keep up.
What is the status of the Corporate
Transparency Act?

A: You are correct! There was a lot – Reporting companies created or registered
of activity at the end of the 2024 between December 3, 2024 and December
year surrounding the Corporate 23, 2024 have an additional 21 days from their
Transparency Act (“CTA”). I imagine original filing deadline to file their beneficial
it was difficult to keep your finger on ownership information report.
the page.
– Reporting companies created or registered
The short answer is that right on or after January 1, 2025 have 30 days to file
now, there is no need to comply their beneficial ownership information report
with the CTA. However, you Burzych after receiving actual or public notice that their
should keep a vigilant eye out for creation or registration is effective.
future developments. The longer answer is a bit more
complicated. The CTA required all beneficial owners of a • December 27, 2024: the merits panel for the United
reporting company to comply with the CTA’s January 1, States Court of Appeals for the 5th Circuit (merits
2025 beneficial owner reporting deadline. The end of the panel) vacated the portion of 5th Circuit motion
2024 year had these additional developments: panel’s order that lifted the earlier nationwide
preliminary injunction, meaning the December 3,
• December 3, 2024: a United States District Court 2024 nationwide injunction is now again in force.
for the Eastern District of Texas issued a nationwide The merits panel of the 5th Circuit reasoned that
injunction to prohibit the federal government from the status quo should be maintained while the
enforcing the CTA. The court held that the CTA is constitutionality of the CTA is determined.
likely unconstitutional because it is outside the scope
of Congress’ power and authority. So as of December • January 24, 2025: the US Supreme Court overturned
3, no one needed to comply with the CTA. the 5th Circuit’s injunction and stayed the national
injunction above, meaning that compliance with the
• December 23, 2024: the United States Court of CTA is now required.
Appeals for the 5th Circuit (motion panel) lifted
the nationwide preliminary injunction. As a result, • January 25, 2025: FINCEN (the Treasury Department’s
the United States Treasury’s Financial Crimes Financial Crimes Enforcement Network) which
Enforcement Network published the following CTA enforces the CTA issues guidance that since there
reporting deadlines: remains another nationwide injunction regarding the
enforcement of the CTA, compliance with the CTA is
– Reporting companies created or registered suspended, meaning that compliance with the CTA is
prior to January 1, 2024 must file their beneficial not now required.
ownership information report by January 13, 2025.
For the time being, business owners can hold off on
– Reporting companies created or registered on or reporting or alternatively, may make the decision to
after September 4, 2024 that had a filing deadline voluntarily report beneficial owners under CTA. However,
between December 3, 2024 and December 23, please keep a vigilant eye on future court developments.
2024 also have until January 13, 2025 to file their What we learned at the end of 2024 and beginning of
beneficial ownership information report. 2025 is that this can change by the day! u

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