On Monday, December 23, 2024, the U.S. Fifth Circuit Court of Appeals (the “Fifth Circuit”) lifted a Texas district court’s order enjoining the Financial Crimes Enforcement Network’s (“FinCEN’s) enforcement of the Corporate Transparency Act (the “CTA”). Following the Fifth Circuit’s decision, the CTA is once again enforceable, effective immediately, and all non-exempt reporting companies must file a beneficial ownership report (“BOI Report”) with FinCEN.
As outlined in our December 5 client bulletin, earlier this month, a district court halted enforcement of the CTA through a nationwide injunction just weeks before the reporting deadline for millions of companies. In response to an emergency motion from the government, the Fifth Circuit stayed the injunction pending appeal.
Prior to the Fifth Circuit’s decision, uncertainty reigned. The original filing deadline for reporting companies formed before January 1, 2024, was January 1, 2025. However, following yesterday’s Fifth Circuit decision, FinCEN issued the following guidance extending filing deadlines:
Litigation surrounding the CTA remains ongoing. While the injunction is lifted, neither the Texas district court nor the Fifth Circuit has yet reached a conclusion on the constitutionality of the CTA. Notably, the Fifth Circuit found that the government “made a strong showing that it is likely to succeed on the merits in defending the CTA’s constitutionality.” As of today, the CTA is back in effect and enforceable.
