Update on the Corporate Transparency Act as of January 7, 2025

On December 26, 2024, a merits panel of the U.S. Court of Appeals for the Fifth Circuit reestablished a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) by the Financial Crimes Enforcement Network (FinCEN).

The merits panel’s order states that it is intended “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments,” and the court subsequently issued a briefing schedule, although it did not disclose the composition of the merits panel that issued the order and is handling the case. The parties’ deadlines to submit briefs extend through the end of February 2025, and the case is scheduled for oral argument on March 25, 2025.

Pursuant to this preliminary injunction, FinCEN issued an alert on December 27, 2024, stating that all reporting companies under the CTA are not currently required to file beneficial ownership information (BOI) with FinCEN and further, that all reporting companies are not subject to liability if they fail to file while the preliminary injunction remains in place. FinCEN will continue to accept beneficial ownership reports on a voluntary basis.

The Department of Justice has asked Supreme Court to stay nationwide injunction pending determination CTA’s constitutionality by Fifth Circuit.