A panel of the Fifth Circuit has reinstated the nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (the “CTA”). This decision comes just three days after another panel of the same court stayed the injunction. As a result of this newest ruling, Reporting Companies are once again not required to comply with the CTA’s reporting obligations, including the recently extended deadlines.
Earlier this week, as discussed in our December 24, 2024 Legal Alert, a panel (the “motions panel”) of the Fifth Circuit Court of Appeals granted an order in favor of the government’s emergency motion to vacate the preliminary injunction issued by the U.S. District Court for the Eastern District of Texas, such that filing obligations again became mandatory. However, in an order filed December 26, 2024, a different panel of the Fifth Circuit (the “merits panel”) has vacated the motion panel’s stay of the nationwide preliminary injunction, reviving the injunction. As a result, the obligation for Reporting Companies to file beneficial ownership information reports (“BOIRs”) is once again non-mandatory unless and until the injunction is removed or overturned.
FinCEN issued a statement today recognizing the latest order, stating that “as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.” The statement can be found here, under the “Alerts” portion of the page.
Given the ongoing uncertainty surrounding the enforcement of the CTA, we recommend that Reporting Companies continue any analysis and preparation of BOIRs and remain prepared to file promptly if required.
Our team will continue to monitor developments and provide updates as they occur. If you have questions about your obligations under the CTA or how the injunction impacts your company, please contact your Davis Graham attorney.
For more information on the CTA’s reporting requirements, please refer to Davis Graham’s past CTA legal alerts:
- The Corporate Transparency Act – Basics That Every Business Formed or Registered in the U.S. Needs to Know
- Corporate Transparency Act – Reporting Deadline (January 1, 2025) for Established Reporting Companies Approaching
- Corporate Transparency Act – Nationwide Injunction Temporarily Stays Reporting Deadline
- Corporate Transparency Act – Reporting Again Required Following Stay of Preliminary Injunction
Please contact Nathan Goergen, Sheila Forjuoh, or Erin Mooney with any questions.