The continuing saga of the Corporate Transparency Act

This week has been an eventful one in the legal battle over the Corporate Transparency Act (CTA).

On December 23, 2024, in response to an emergency appeal of the grant of a preliminary injunction issued earlier in the month by a district court in Texas, a three-judge panel of the Fifth Circuit Court of Appeals issued a stay of the injunction and reinstated the Corporate Transparency Act, including the January 1, 2025 deadline for reporting companies in existence on January 1, 2024, to file their initial report of beneficial ownership information.

In response, the Financial Crimes Enforcement Network (FinCEN) issued extended deadlines for many, but not all, entities. Notably, the January 1, 2025 due date for ​historic entities was extended until January 13, 2025.

On December 26, 2024, the Fifth Circuit Court of Appeals reversed course and reinstated the preliminary injunction issued by the district court, thereby suspending the CTA while the lower court addresses the merits of the dispute.

On December 27, 2024, FinCEN announced that the filing obligations under the CTA have been suspended as long as the injunction remains in effect.

The fight over the CTA will no doubt continue into the new year, and further judicial proceedings, FinCEN pronouncements and possible legislative action may be anticipated.

Key takeaway

At this time, the enforcement of the CTA has been enjoined, although FinCEN continues to accept reports of beneficial ownership interest.  Clients that choose not to file based on the newly-reinstated preliminary injunction should be prepared to file promptly if the terms of the injunction are altered.

If you have any questions regarding the CTA, please contact Jack Beeler, Jim Mattimoe, Sue Cliffel or Diana Jia,