As of December 26, 2024, the nationwide injunction that had been lifted only days ago has been put back in effect.[1] This means that reporting requirements under the Corporate Transparency Act may not be enforced for the time being. The court stated in its brief order that its intent in doing so is to “preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments[.]”[2]
Importantly, this may only be a short postponement of the reporting requirement if the government wins its case on the merits in the coming days or weeks.
As discussed in a previous update below, the United States Court of Appeals for the Fifth Circuit had issued an order on December 23 that would have allowed FinCEN to enforce this law pending litigation on its validity and constitutionality, but that order has now been vacated until the court reaches its final decision on the plaintiffs’ challenge to the legality of the CTA itself.
Accordingly, reporting beneficial ownership to FinCEN—for the time being and subject to continuing changes, reversals, and further developments—is not required, although it can be done on a voluntary basis.
Those reporting companies that have not yet filed reports with FinCEN should stay posted for further developments but prepare in the meantime to have the information needed to file reports if the reporting obligation is put back in effect.[3]
[1] Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir. Dec. 26, 2024) (order vacating the Dec. 23, 2024 order granting emergency motion for stay pending appeal).
[2] Id.
[3] For detailed discussion and explanation of the CTA and FinCEN’s regulations, see our firm’s previous post on the CTA here.
