The Corporate Transparency Act (CTA) has experienced a series of legal reversals affecting its enforcement status. On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit issued an order in Texas Top Cop Shop, Inc. et al. v. Garland et al., effectively pausing the beneficial ownership information (BOI) reporting requirements established by the CTA.
This development follows a sequence of judicial decisions:
December 3, 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcing the CTA’s reporting requirements.
December 23, 2024: A panel of the Fifth Circuit stayed the preliminary injunction, reinstating the BOI reporting requirements. In response to the December 23 court order, the Financial Crimes Enforcement Network (FinCEN) extended certain BOI reporting deadlines. We reviewed that decision here.
December 26, 2024: The Fifth Circuit vacated the December 23 stay, once again pausing the BOI reporting requirements.
Currently, the CTA’s reporting requirements are not in effect. However, the ongoing litigation means these requirements and associated deadlines could be reinstated, and absent the injunction, many companies would face a January 13, 2025, deadline to submit initial BOI reports.
Given this uncertainty, companies should review with legal counsel whether they are subject to these reporting requirements and at a minimum continue to be prepared to file BOI reports with FinCEN by the applicable deadline. While FinCEN extended reporting deadlines following the December 23 decision, it is unclear if similar extensions would be granted if the requirements are reinstated.
For more information on the CTA, including reporting obligations and identifying beneficial owners, schedule a meeting with us today here.