On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit vacated its prior December 23, 2024 decision to stay the December 3, 2024 preliminary injunction that temporarily blocked enforcement of the Corporate Transparency Act (“CTA”) and its reporting rule on a nationwide basis. As of the date of this notice and on short order, the nationwide injunction blocking enforcement of the CTA has been reinstated nationwide. Once again, this means that reporting companies are not required to comply with the CTA’s reporting requirements because FinCEN is temporarily blocked from enforcing the CTA and its reporting rule.
While reporting companies are once more relieved from CTA compliance for the moment, they should continue to gather necessary beneficial ownership information and prepare to promptly make CTA filings if the preliminary injunction is lifted or a final decision upholds the CTA. Given that the filing process places potentially sensitive information with the government, some reporting companies may want to wait to see whether there is a resolution of the matter before making a CTA filing. However, FinCEN is still accepting CTA filings while the preliminary injunction is in place. Therefore, a conservative approach for some reporting companies may be to continue to file under the CTA against the backdrop of an uncertain future.
For more information on the CTA, please refer to our earlier publications (Corporate Transparency Act Update: Fifth Circuit Court Stays Preliminary Injunction Blocking Enforcement of the CTA; FinCEN Issues Updated Guidance, Preliminary Injunction Temporarily Blocks Enforcement of the Corporate Transparency Act, July and September 2024 Update, A Series of the Latest Updates for Reporting Companies, and The Corporate Transparency Act: A New Federal Disclosure Requirement for Certain Entities) or FinCEN’s small business resource webpage for beneficial ownership information (available here). If you would like assistance with and/or have questions regarding CTA compliance or filings, please contact Aaron Kacer or Steve Lawrence.
