Corporate Transparency Act Injunction Reinstated by Fifth Circuit
On December 26, 2024, a Fifth Circuit panel reinstated a nationwide injunction that effectively pauses beneficial ownership information (BOI) reporting requirements established by the Corporate Transparency Act (CTA).
To recap the recent developments:
- December 3, 2024 – The Initial Injunction
On December 3, 2024, the US District Court for the Eastern District of Texas issued a nationwide preliminary injunction that suspended the enforcement of the CTA. - December 23, 2024 – The Fifth Circuit's Stay
On December 23, a panel of the Fifth Circuit grants stay of the preliminary injunction, putting the BOI reporting requirements back into effect. Reporting is mandatory again (FinCEN extends deadline to January 13, 2025). - December 26, 2024 – The Reversal
On December 26, a Fifth Circuit panel vacated the stay that was previously issued on December 23. Reporting is optional once more.
As a result of the latest Fifth Circuit order, the BOI reporting requirements are, once again, paused, pending a decision by the Fifth Circuit or further appeal.
Despite this current hold, the ongoing litigation means that the CTA's requirements could be reinstated in short order. Initially, many companies were required to submit their BOI reports by January 1, 2025 (extended to January 13, 2025, following the initial stay). All filings, however, are now optional and it is unclear when that will be lifted or changed.
Given the uncertainty, companies should take time to determine whether they fall under these requirements and be prepared to file BOI reports with FinCEN, if necessary. It remains unclear if FinCEN will extend the deadlines again should the reporting requirements be reinstated, but they will continue to accept voluntary filings during the ongoing litigation.
For questions about reporting deadlines or the ongoing litigation status of the CTA, contact one of our corporate attorneys.
The case is Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 24-40792.
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