The Corporate Transparency Act (“CTA”) has been on a journey this past month with a whirlwind of court rulings: halted by a federal district court, reinstated by the Fifth Circuit’s motions panel, had its reporting deadlines extended by FinCEN, and then halted again by the Fifth Circuit’s merits panel. Amidst all this back-and-forth, predicting what will happen next can be challenging, but here are a few possible scenarios.
(1) The Fifth Circuit Court of Appeals Briefing Schedule Continues as Planned – CTA’s Enforcement Postponed Until at Least March 25, 2025. The Fifth Circuit Court of Appeals has set the following briefing schedule. If it proceeds as planned, the CTA’s reporting obligations will remain halted until at least March 25, 2025:
- February 7, 2025: Government’s (Appellants’) Brief is Due
- February 21, 2025: Plaintiffs’ (Appellees’) Brief is Due
- February 28, 2025: Government’s (Appellants’) Reply Brief is Due
- March 25, 2025: Oral Argument to Convene
(2) The Government Petitions the Vacated Injunction – CTA’s Enforcement Could Abruptly Return. Similar to the federal district court’s initial injunction, the Government could petition to have the merits panel’s decision to vacate the stay of the CTA’s nationwide injunction reviewed by the full Fifth Circuit Court. If this occurs, the full Fifth Circuit Court could overturn the merit panel’s ruling, reinstating the CTA and its beneficial owner reporting requirements.
(3) The Supreme Court Intervenes – CTA’s Enforcement Could Abruptly Return. In response to the recent ruling, the Government filed a petition with the U.S. Supreme Court for an emergency stay of the district court’s injunction. If the U.S. Supreme Court decides to act, this could bring the CTA back into effect rather abruptly.
It is worth noting that while the CTA and its requirements could be reinstated quickly, any decision affecting the reporting requirements would likely lead FinCEN to extend its deadlines for reporting companies once again, as it did after the initial reinstatement.
While these hypotheticals are interesting, based on the December 26th court order, the most likely scenario (absent intervention by the U.S. Supreme Court) is that enforcement of the CTA will continue to be delayed until at least Spring of 2025. We will continue to provide any updates as this unique and unpredictable case continues to move through the courts.
