Key takeaways:
- The Fifth Circuit has vacated the December 23rd stay order on the nationwide injunction related to the Corporate Transparency Act (CTA) and its reporting requirements.
- As a result, as of December 26th, the beneficial ownership information (BOI) reporting requirements are now voluntary pending the appeal, which remains expedited
On December 3, 2024, a federal district court in the case of Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478, entered an order enjoining enforcement of the Corporate Transparency Act and its corresponding reporting rule.
The Government appealed, and on December 23, 2024, a motions panel of the U.S. Court of Appeals for the Fifth Circuit granted the Government’s emergency motion for a stay pending appeal.
On December 26, 2024, the Fifth Circuit vacated the stay that had been issued by the motions panel that had lifted the preliminary nationwide injunction. As a result, the CTA BOI reporting requirements are back to being voluntary, pending the appeal, which the court confirmed remains expedited.
In response, FinCEN has added the following alert on its website:
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.
