The Financial Crimes Enforcement Network Monday reinstated and extended the deadline for U.S. legal entities to file beneficial ownership information to the body after an appeals court lifted a nationwide injunction against the reporting requirements.
On December 3, 2024, a Texas judge temporarily paused the Corporate Transparency Act’s beneficial ownership reporting requirement, which was set to take effect on January 1, 2025. However, on December 23, 2024, the Fifth Circuit Court of Appeals granted the government’s request for an immediate stay, lifting the injunction and extending the reporting deadline to January 13, 2025, pending further legal developments. In light of the decision, reporting companies are required to submit beneficial ownership information to Fincen, but the Treasury Department has extended the filing deadlines.
Companies created or registered before January 1, 2024 now have until January 13, 2025 to file, as do those created between September 4 and December 23, 2024. Companies registered between December 3 and December 23, 2024, have an additional 21 days to file.
Companies qualifying for disaster relief may have further extended deadlines. From January 1, 2025, newly created companies will have 30 days after receiving notice of registration to file. However, certain businesses involved in ongoing litigation against the rule are temporarily exempt from reporting.
The Beneficial Ownership Information registry — launched by the Treasury Department financial crimes department, known as Fincen, on January 1, 2024 — was established through the Corporate Transparency Act, passed by Congress in 2021. The registry mandates that most U.S. legal entities report their true owners to the government. The law is aimed at combating illicit activity disguised using shell companies — anonymous businesses without physical presences or independent economic value.
The registry is part of broader efforts to address vulnerabilities in the U.S. financial system, but has received some political pushback, particularly from small businesses who argue the reporting requirements are burdensome.
The 2021 law was hailed as the most significant anti-money-laundering legislation in decades by anti-corruption and transparency advocates. Some of the law’s harshest critics, however, come from the financial industry, with some banking groups arguing it adds unnecessary burdens without delivering meaningful benefits.
The American Bankers Association — which urged Fincen to withdraw a rule implementing the CTA — labeled the beneficial ownership collection regime “fatally flawed,” citing restrictive privacy measures that hinder access to the registry and increase compliance burdens
The implementation of the registry also
Critics of the registry like Representative French Hill, R-Ark., expressed disappointment that the registry is in effect once again.
“I fought the CTA’s design, voted against it, offered a better approach, and have been fighting against the Biden-Harris Administration’s flawed implementation on behalf of small businesses across America,” Hill said. “As incoming Chairman of the House Financial Services Committee, I will work with the incoming Trump Administration to halt and revise the implementation of this harmful law and accompanying rules.”