On December 26, 2024, the Court of Appeals for the Fifth Circuit VACATED a ruling early this week to stay the nationwide injunction enjoining the U.S. government from enforcing the Corporate Transparency Act (the “CTA”) and the corresponding reporting requirements. This newest court development turns the mandatory reporting requirement back to “off,” according to the Court for the purpose of preserving the “the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.”
The CTA requires that certain corporations, LLCs, and other entities make disclosures to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) regarding beneficial ownership (defined to include at least 25% ownership or substantial control over a subject entity). Mandatory reporting is now on hold until further court action. This decision is one of several pending in the federal courts, including at the appellate level. Further legal proceedings in this and other related cases may alter or impact this case. Updates from FinCEN can be found here, https://fincen.gov/boi.
Consistent with our previous guidance on the CTA, Lewis Roca will advise clients on CTA compliance only if Lewis Roca and the client have expressly agreed in writing to an engagement for that purpose.
Read our previous coverage on the CTA here, and check here for any updates.
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