THIS STORY IS BEING UPDATED AS DEVELOPMENTS OCCUR….NEWEST UPDATES AT THE BOTTOM.
The National Law Review is reporting that on December 3rd, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA). However, they caution that the Court’s order is not a final decision, so businesses should remain cautious and be prepared to comply with the CTA reporting requirements if they are revived as the case proceeds, or if the injunction is lifted.
“Uncertainty Regarding Future Enforcement: The Court’s order is not a final decision, so businesses should remain cautious and be prepared to comply with the CTA reporting requirements if they are revived as the case proceeds, or if the injunction is lifted.”
This is a developing story, stay tuned and consult your attorney if you have questions.
Click here to read the full stay at the National Law Review.
Click here to read the court decision.
UPDATE 12/30/24
The National Law Review is reporting that in late December the Fifth District Court of Appeals issued a stay on the previous order:
“On December 23, 2024, a three-judge panel of the Fifth Circuit ordered that the lower court’s nationwide preliminary injunction against the enforcement of the CTA is stayed, and also ordered that the “appeal is EXPEDITED to the next available oral argument panel.” While the situation remains fluid and continues to evolve, in light of a December 23, 2024 stay of the preliminary injunction, the compliance deadline of January 1, 2025 would once again be effective for reporting companies in existence as of January 1, 2024, and the 90 day filing deadline would once again be effective for reporting companies formed on or after September 4, 2024 and before January 1, 2025.”
Click here to read the full story at the National Law Review.
UPDATE 1/3/25
The National Law Review says that, according to FinCEN’s website, reporting companies may continue to voluntarily submit BOI Reports but this is not required as the appeal is pending. The NLR says It is strongly suggested that reporting companies remain up to date on the latest developments.
On Tuesday, December 3, 2024, in Texas Top Cop Shop, the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction for the filing of BOI Reports.
Background
On December 5, 2024, the Department of Justice (DOJ) appealed to the Fifth Circuit seeking a stay of the December 3, 2024, decision of the district court or, alternatively, seeking to narrow the injunction to cover only the named plaintiffs or the members of the named plaintiff. The DOJ had sought a similar stay from the U.S. District Court for the Eastern District of Texas, but the court denied the DOJ’s request on December 17, 2024.
Thereafter on December 23, 2024, a panel for the Fifth Circuit granted the DOJ’s motion to a stay pending appeal.
On December 26, 2024, a different panel from the Fifth Circuit issued an order that vacated the court’s prior December 23 order granting a stay of the preliminary injunction. As a result, the injunction issued in Texas Top Cop Shop remains in effect nationwide and reporting companies are currently not required to file beneficial ownership information with FinCEN.
UPDATE 1/24/25
The Wall Street Journal is reporting that enforcement of the Corporate Transparency Act, (requiring companies to disclose their ownership) remains on hold despite a U.S. Supreme Court ruling on 1/23/25.
“The Supreme Court on Thursday overturned a lower court order that was blocking enforcement of the CTA. However, a separate national injunction issued earlier this month by a federal judge apparently remains in place and continues to block the law’s implementation.”
Click here to read the U.S. Supreme Court ruling from 1/23/25.
Click here to read the full story at the Wall Street Journal.
UPDATE 2/19/25
The Wall Street Journal is reporting that implementation of the Corporate Transparency Act (CTA) is back on after a federal judge in Texas reversed an injunction he issued last month.
The Treasury Department’s Financial Crimes Enforcement Network, which oversees the enforcement of the law, on Tuesday issued a notice that extended the filing deadline for most companies to March 21. FinCEN said it recognized that companies may need additional time to comply.
Click here to read the 2/18/25 FinCEN notice. Excepted below:
FinCEN Extends Beneficial Ownership Information
Reporting Deadline by 30 Days;
Announces Intention to Revise Reporting RuleWASHINGTON, D.C. –– With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury (Treasury) recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.
