As outlined in our prior update, on December 3, 2024, a Texas federal district court issued a preliminary injunction that temporarily blocks the Corporate Transparency Act (CTA) and its implementing regulations from taking effect nationwide.
The CTA regulations set January 1, 2025 as the reporting deadline for any covered companies created or registered prior to January 1, 2024.
On December 5, 2024, the U.S. Department of Justice (DOJ) appealed the district court’s injunction halting implementation of the CTA to the U.S. Court of Appeals for the Fifth Circuit. To date, the DOJ has not requested either to vacate or modify the district court’s injunction pending appeal or an expedited appeal, though it may still do either.
In the meantime, FinCEN has issued an alert on its website offering the following guidance:
In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
This alert confirms our previous guidance that no filings are required while the injunction remains effective – in other words, unless and until the DOJ’s appeal is successful or the Fifth Circuit grants interim relief. As a result, firms may wish to refrain from submitting any reports pending further clarity. That said, we continue to believe it is prudent for companies subject to the January 1, 2025 filing deadline to continue to prepare their CTA filings. In the event the DOJ obtains interim or expedited relief in the coming weeks and the injunction is lifted, proceeding with filing preparations now may avoid the possibility of having to finalize required CTA filings on short notice. If you have any questions concerning this memorandum, please feel free to contact your regular contacts at the firm.