U.S. Companies Required to Resume Beneficial Ownership Filings Following Appeals Court Decision

Almost all U.S. companies are once again required to file beneficial ownership (BO) information, following a legal victory for the U.S. government. The Financial Crimes Enforcement Network (FinCEN), the anti-money laundering (AML) unit of the Treasury Department, announced that a federal Court of Appeals decision has reinstated BO filing requirements, although the deadline for submission has been extended.

“In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated, are once again required to file beneficial ownership information with FinCEN,” the agency stated in a recent announcement.

The deadline for companies created before January 1, 2024, to submit BO information has been extended to January 13, 2025. For businesses established during 2024, the filing deadlines vary based on the registration date, with most deadlines falling in January or February of the following year. Details on specific deadlines are available online.

A narrow group of companies involved in ongoing legal challenges remains exempt from the filing requirements.

Beneficial ownership rules are part of the Corporate Transparency Act (CTA) and are designed to reveal the true owners behind business entities. FinCEN Director Andrea Gacki has consistently emphasized the importance of these filings, stating they “would help law enforcement to pursue criminals that operate illicitly through anonymous shell companies.”

While the CTA initially required most companies to submit BO filings by the end of 2024, its enforcement faced legal hurdles. Small businesses challenged the rules, arguing they infringed upon privacy rights. A Texas district court agreed, declaring the BO requirements unconstitutional and issuing an injunction that temporarily halted the filings.

However, FinCEN recently confirmed that the U.S. government secured a temporary stay of the injunction from the U.S. Court of Appeals. The agency explained, “On December 23, the U.S. Court of Appeals granted a stay of the [Texas] district court’s preliminary injunction enjoining the CTA.”

The Texas case is one of several legal challenges to the CTA pending in courts across the country. According to FinCEN, “Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe that the CTA is constitutional.”

While the broader legal battle over the CTA continues, the temporary stay reinstates the BO filing requirements for most U.S. companies, reinforcing the government’s push for greater corporate transparency.

By fLEXI tEAM