On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit reinstated a nationwide preliminary injunction halting the enforcement of the Corporate Transparency Act (CTA) and the final rule requiring beneficial ownership reporting. This decision followed an emergency motion for rehearing filed by the plaintiffs and ensures that entities are not currently required to comply with CTA’s reporting requirements.
This injunction continues to apply across the country, preserving the constitutional status quo while the Fifth Circuit hears substantive arguments on the case. The merits panel has scheduled oral argument for March 25, 2025.
Although the reporting requirements are not currently enforceable, businesses may choose to voluntarily submit Beneficial Ownership Information Reports (BOIRs) to the Financial Crimes Enforcement Network (FinCEN). Deadlines for initial filings, particularly for entities created or registered before January 1, 2024, have been extended to January 13, 2025. However, penalties will not be assessed against reporting entities that choose not to file prior to January 13, 2025 due to the injunction.
What This Means for Businesses
This decision once again delays the requirement for businesses to report their beneficial ownership information under the CTA, meaning that companies are not presently obligated to submit BOIRs. However, businesses should be prepared for potential changes, as the decision is not final, and the court will address the merits of the case in early 2025.
Even with this injunction in place, businesses that wish to be proactive may still submit their ownership information voluntarily to FinCEN. This is especially important for companies that are considering future compliance with CTA reporting requirements or seeking to demonstrate transparency ahead of any final ruling.
Companies should continue to track developments related to the CTA and consider evaluating their corporate structures and beneficial ownership arrangements to ensure they are prepared when enforcement resumes.
DBL Law is actively monitoring the case and will provide updates as necessary. For any questions regarding the CTA and its impact on your business, please reach out to Margot Tierney or your regular DBL Law contact.
