The 5th Circuit Court of Appeals has stopped enforcement of the Corporate Transparency Act again, which means businesses do not need to meet compliance by the original January 13, 2025 deadline.
The Timeline of Development
2021: Congress passed the Corporate Transparency Act and set a deadline by January 1, 2025.
December 3, 2024: A Texas federal court issued an injunction, which halted the CTA’s reporting obligations.
December 23, 2024: A motions panel of the 5th Circuit overturned the injunction, reviving the CTA. The reporting deadline was postponed until January 13, 2025.
December 26, 2024: Another 5th Circuit panel reinstated the nationwide injunction.
Upcoming: The 5th Circuit will hear arguments on March 25, 2025, with briefing schedules set for February.
What Does This Block Mean for Businesses?
Reporting Companies are not obligated to file beneficial ownership information (BOI) reports, including initial reports for entities established before January 1, 2024, originally due by January 13, 2025. Additionally, the U.S. Financial Crimes Enforcement Network (FinCEN) has clarified that companies may voluntarily submit BOI reports if they want, though it is not mandatory now. Furthermore, due to the uncertain nature of these developments, it is crucial to stay updated on any changes and be ready to comply should the injunction be lifted.
The Next Steps
The Corporate Transparency Act (CTA) has encountered major challenges, creating much uncertainty for businesses. Although compliance obligations are on hold, future court decisions could potentially reinstate the CTA’s requirements.
Thus, it’s essential to stay updated on legal developments and assess your preparedness to meet CTA compliance should the law be revived. While the current injunction provides temporary relief, the shifting legal landscape necessitates ongoing vigilance.