In a per curiam ruling dated Dec. 23, 2024, a three-judge panel of the Fifth Circuit Court of Appeals granted a temporary stay of the district court’s Dec. 5 order and injunction against enforcement of the Corporate Transparency Act and its beneficial ownership information (“BOI”) reporting requirement. The Fifth Circuit concluded that the Corporate Transparency Act was within Congress’ power under the Commerce Clause and that a last-minute injunction of the statute necessarily inflicts irreparable harm on the government. This has the effect of reinstating prior reporting deadlines under the Corporate Transparency Act. Click here for a copy of the unpublished order and here to see our previous coverage of this case.
In response, Financial Crime Enforcement Network (“FinCEN”) has provided additional guidance as to new reporting deadlines, which in some cases briefly extends prior deadlines. Specifically:
- Reporting companies that were created or registered prior to Jan. 1, 2024, now have until 13, 2025, to file their initial BOI.
- Reporting companies that were created or registered on or after Sept. 4, 2024, that had a filing deadline between Dec. 3–23, 2024, now have until 13, 2025, to file their initial BOI.
- Reporting companies that were created or registered on or after Dec. 3, 2024, have an additional 21 days from their original filing deadline to file their initial BOI (or 111 days following their initial formation).
- Reporting companies that will be created or registered after Jan. 1, 2025, will have the original 30 days to file after the date of their formation or registration.
The Fifth Circuit’s ruling in this appeal does not impact the Northern District of Alabama’s ruling in National Small Business United v. Yellen, which held that members of the National Small Business Association are not required to report BOI. That case is pending appeal in the 11th Circuit Court of Appeals, and the decision may still be overturned. The Fifth Circuit’s ruling does not change the deadline for updating BOI that has already been reported.
The panel of judges disagreed whether to stay the district court’s order in full or merely to stay the injunction in respect of parties other than the named plaintiffs, as other courts have done. Ultimately, the order was stayed in full pending a decision of the merits by the court’s full panel. The Fifth Circuit and U.S. District Court for the Eastern District of Texas have not definitively held on the constitutionality of the Corporate Transparency Act, and it may yet be found unconstitutional.
Plaintiff-appellees National Federation of Independent Business already requested a rehearing en banc from the Fifth Circuit. Please reach out to the authors or your regular Brownstein counsel for questions navigating the developing case law surrounding the Corporate Transparency Act.
This document is intended to provide you with general information regarding recent appellate decisions regarding the Corporate Transparency Act. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.