On December 23, 2024, the Fifth Circuit Court of Appeals issued an order granting a stay of the December 3rd nationwide injunction against the Corporate Transparency Act (CTA) previously issued by the U.S. District Court for the Eastern District of Texas and discussed in our prior alert. The Fifth Circuit’s ruling results in an immediate reinstatement of the CTA’s beneficial ownership reporting requirements.
Court Reverses Course: Beneficial Ownership Information Reporting Halted, Again
In rapid fashion, the Fifth U.S. Circuit Court of Appeals has reinstated a nationwide injunction that had been issued earlier this month by a federal judge in Texas that concluded the Corporate Transparency Act (CTA) was likely to be found unconstitutional. The Financial Crimes Enforcement Network (FinCEN), that is charged with overseeing the CTA reporting requirements, has yet to put out a response to this latest halt of beneficial ownership information (BOI) reporting requirements.
As discussed in a prior alert, on December 23, 2024, a motions panel of the Fifth Circuit Court granted the Federal government’s emergency motion for a stay of the nationwide injunction pending appeal, resulting in reporting companies being obligated to file their BOI reports by their applicable deadline as well as FinCEN issuing extensions for the deadlines. With this latest ruling, submitting BOI reports again becomes optional, for the time being, as this matter continues to play out in the court system.
The appeal has been expedited to the Fifth Circuit Court’s next available oral argument panel. We will continue to provide updates.
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