On December 26, the U.S. Court of Appeals for the Fifth Circuit vacated the previous grant of a stay of the injunction enjoining enforcement of the Corporate Transparency Act (CTA) and beneficial ownership reporting rule. As a result, the nationwide preliminary injunction originally granted by the district court is once again in effect pending consideration of the DOJ’s appeal by the Fifth Circuit’s merits panel.
In vacating the stay of the injunction, the Fifth Circuit determined “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” As reported in our previous Client Alert on December 24, the Fifth Circuit had indicated that the hearing will occur on the next available date, but the Court has now scheduled oral arguments for the case in late March 2025.
In light of these developments, we expect FinCEN to confirm that reporting companies will not be required to file beneficial ownership reports while the injunction remains in effect. (As discussed in our December 24 Client Alert, FinCEN had most recently provided an extension of various filing deadlines, including, in particular, setting January 13, 2025 as the deadline for reporting companies created or registered prior to 2024.) We continue to monitor for developments in this evolving situation.
If you have any questions concerning this memorandum, please feel free to contact your regular contacts at the firm.