Nationwide Injunction Against the Corporate Transparency Act Reinstated

Nationwide Injunction Against the Corporate Transparency Act Reinstated

On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit reinstated a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) and its Reporting Rule. This ruling effectively suspends all filing deadlines related to the CTA, meaning that no companies are currently required to submit beneficial ownership information reports, including those due by January 13, 2025, for entities formed or registered before 2024

Key Developments

1. Court Ruling: The Fifth Circuit vacated a previous stay that had allowed the government to enforce the CTA, stating that the injunction would remain in place while the court considers the substantive arguments in an expedited appeal

2. Impact on Reporting Companies: As a result of this ruling, reporting companies are not obligated to file any reports under the CTA until further notice. However, they may choose to submit reports voluntarily

3. Timeline of Events:

   • December 3, 2024: A district court issued a nationwide injunction against the CTA.

   • December 5, 2024: The government filed a notice of appeal.

   • December 23, 2024: The Fifth Circuit initially reinstated the CTA but later reversed this decision on December 26, 2024, reinstating the injunction.

4. Future Considerations: The Fifth Circuit has set a briefing schedule for the appeal, with key dates for submissions in early 2025. The court's decision will address the constitutionality of the CTA, and it is anticipated that the case may eventually reach the U.S. Supreme Court

   Conclusion

   The situation surrounding the Corporate Transparency Act remains fluid, with ongoing legal challenges and potential changes in enforcement. Companies affected by the CTA should stay informed about developments and be prepared to act if the injunction is lifted in the future

Hashtags

#CorporateTransparencyAct #CTA #LegalUpdate #BusinessCompliance #Injunction #FifthCircuit #BeneficialOwnership #FinCEN #CorporateLaw