As you may be aware, on December 3, 2024, a court in the Eastern District of Texas issued a nationwide injunction against the Corporate Transparency Act, determining that it exceeded Congress’ constitutional authority. While this may, at first blush, appear to eliminate the need to comply, in a previous case the Department of Justice announced it would appeal a similar ruling and subsequently has appealed that ruling. We anticipate, though cannot say with any certainty, that the Department of Justice will take the same approach here and may seek a stay of the injunction pending an appeal. UPDATE: On December 5, the Department of Justice filed an appeal of the court’s ruling. On December 6, FinCEN advised that it will respect the injunction and not penalize any filer who declines to file while the injunction remains in place. Gunster continues to recommend complying with the Corporate Transparency Act pending final resolution of this case.
We believe this for several reasons. First, despite the results of the 2024 election, nothing has changed yet at the Department of Justice. Second, the Corporate Transparency Act was actually passed into law under the first Trump administration. While we recognize the public pressures that now exist against it, this is not a “Democratic initiative,” but rather one passed under the incoming President’s watch. Third, the Corporate Transparency Act remains a watered down version of complying with longstanding treaty obligations that the United States has with numerous other countries. We anticipate that some version of compliance with the treaties will ultimately occur and the Corporate Transparency Act was, in many respects, the least invasive way of accomplishing that.
For existing companies, FinCEN had already issued a 6-month extension of the compliance deadline for companies with a principal place of business in Florida with a compliance deadline ending on or before January 2, 2025. FinCEN also has stated it will “work with any reporting company … that must consult records located in” Florida. This means that all companies formed prior to 2024 with a principal place of business in Florida now have until July 1, 2025 to complete their initial BOI reports. Note, though, that for companies with a compliance deadline after January 2, 2025, there is no announced extension. Unless and until a final, non-appealable order is entered or the government announces it will accept a judicial determination, we recommend continued filing by the applicable deadline to avoid the potential civil or criminal penalties for non-compliance.
As a reminder, except for new entities that Gunster forms or has formed after January 1, 2024, Gunster is not preparing CTA filings but we would be happy to recommend third party providers to assist with the filings. Our team remains available to discuss whether an entity is exempt. Please contact your regular Gunster attorney(s) if you have any questions regarding the CTA.
We continue to monitor developments in this area.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
About Gunster
Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 12 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 300 attorneys and consultants, and over 290 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com
