In a major legal twist, on December 26, 2024, the Fifth Circuit Court of Appeals vacated the stay and reinstated a nationwide preliminary injunction, halting enforcement of the Corporate Transparency Act’s (CTA) reporting requirements and its Reporting Rule. This decision also suspends the upcoming compliance deadlines, leaving businesses in a state of uncertainty.
Following the Fifth Circuit’s December 23rd stay of the district court’s injunction, entities were required to disclose beneficial ownership information (BOI) to FinCEN, with initial reports for companies formed or registered before 2024 due by January 13, 2025. However, the Fifth Circuit’s subsequent ruling on December 26, 2024, reinstated the nationwide injunction, pausing these obligations while the court expedites its review of the law’s constitutionality.
Key Dates in the CTA Injunction Timeline:
- December 3, 2024: The U.S. District Court for the Eastern District of Texas issued an injunction blocking the CTA’s enforcement.
- December 23, 2024: The Fifth Circuit temporarily stayed the injunction, reinstating compliance requirements.
- December 26, 2024: The Fifth Circuit vacated the stay and reinstated the injunction, effectively halting all reporting obligations under the CTA.
For now, businesses are not required to file any BOI reports, including updates, corrections, or new filings, until further court rulings. Voluntary filings remain permissible.
What’s Next?
The Fifth Circuit’s expedited appeal schedule indicates the following timeline:
- February 7, 2025: Government’s (appellants’) brief due
- February 21, 2025: Plaintiffs’ (appellees’) brief due
- February 28, 2025: Government’s reply brief due
- March 25, 2025: Oral arguments scheduled
Although current reporting obligations are paused, the situation remains fluid, and businesses should remain vigilant as litigation progresses. KPPB LAW is closely monitoring these developments. Stay tuned for updates or contact our team for tailored guidance on navigating CTA compliance in this evolving landscape.
