Corporate Transparency Act Blocked (Again) by Fifth Circuit

Three days after a motions panel on the Fifth Circuit Court of Appeals granted the government’s emergency motion for a temporary stay on a Texas district court’s nationwide preliminary injunction blocking the enforcement of the Corporate Transparency Act (“CTA”), a merits panel has vacated part of the motion panel’s order.

On December 23, the emergency panel granted the government’s emergency motion for a temporary stay of the injunction, allowing the CTA’s enforcement to proceed while the government’s appeal is pending. On December 24, the plaintiffs filed their petition with the Fifth Circuit for rehearing en banc, following the Fifth Circuit’s decision to stay the injunction. They requested a ruling no later than January 6, 2025. 

On December 26, a merits panel on the Fifth Circuit vacated the part of the emergency panel’s earlier order granting the government’s motion to stay the preliminary injunction enjoining enforcement of the CTA and its reporting rule. This decision suspends enforcement of the CTA, which means reporting companies are not currently required to file Beneficial Ownership (“BOI”) reports with FinCEN by the required deadlines.

The merits panel will now consider the government’s appeal on an expedited timeline. Dinsmore will continue to monitor this situation and provide relevant updates as they become available

In the meantime, entities should continue evaluating their CTA compliance requirements and gather the necessary information to be prepared to file BOI reports in case the filing deadlines are reinstated. Dinsmore’s previous coverage on determining whether your entity must file, and what information is required in the filing, can be found here. Additionally, a template of the BOI Report can be downloaded here, which entities may file directly through FinCEN’s website.

If you have any additional CTA compliance questions, please contact your Dinsmore attorney.