CTA Enforcement On Hold Again
Last week, we reported that the Fifth Circuit Court of Appeals issued an order on December 23, 2024 staying a Texas federal district court’s nationwide preliminary injunction in Texas Top Cop Shop, Inc. et al. v. Garland, et al., which barred enforcement of the Corporate Transparency Act (“CTA”). However, on December 26, 2024, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating that Court’s December 23rd order to stay the preliminary injunction. Consequently, the Texas federal district court’s nationwide preliminary injunction is in effect.
In turn, the Financial Crimes Enforcement Network (“FinCEN”) announced that “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 [injunction] remains in force.”
BOI Reports
Given these developments, we are recommending that clients postpone filing their Beneficial Ownership Information (“BOI”) Reports if they have not already filed. However, they should gather all information required to file and be prepared to file in the event the nationwide preliminary injunction barring enforcement is lifted. Businesses may file their BOI Reports during the injunctive period if they choose to do so.
Updates
We will continue to monitor developments regarding the CTA and provide updates as they occur. Please feel free to contact us if you would like assistance in evaluating your company’s CTA compliance requirements.
The information in this notice is informational in nature and should not be taken as formal legal advice. You should consult an attorney for advice regarding your individual situation.
ALL BUSINESS.™
