Injunction Reinstated: The Corporate Transparency Act and Reporting Requirements Halted Again – For Now

On December 26, 2024, the Merits Panel of the Fifth Circuit Court of Appeals issued an order in the case of Texas Top Cop Shop, Inc. et al. v. Garland, et al., effectively reinstating the injunction against the enforcement of the Corporate Transparency Act (CTA) and the Beneficial Ownership Information (BOI) Reporting. This decision came just three days after the same court had lifted the preliminary injunction, allowing the enforcement of the CTA and BOI reporting to proceed.

What this means:

For now, reporting companies and affected individuals should closely monitor developments in the case and either voluntarily file their BOI report or prepare to file by gathering all required information, in case the injunction is lifted again.

The past month has seen notable court activity with extensive back and forth. Below is a brief history of the important dates of the case:

• On December 03, 2024, the US District Court of the Eastern District of Texas issued a preliminary nationwide injunction against the enforcement of the CTA including the BOI reporting and due dates.
• On December 05, 2024, the government appealed the injunction to the Fifth Circuit Court of Appeals
• On December 06, 2024, the Financial Crimes Enforcement Network (FinCEN) issued an alert stating that “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
• On December 13, 2024, the government filed an emergency motion to stay the districts court’s preliminary nationwide injunction with the Fifth Circuit Court of Appeals
• On December 23, 2024, the Fifth Circuit Court of Appeals issued an order granting the government’s stay pending appeal of the preliminary nationwide injunction, effectively reinstating the CTA and the BOI reporting requirements. The court also ordered to expedite the appeal to the next available oral argument panel.
• Also on December 23, 2024, after the court order, FinCEN issued an alert extending certain BOI reporting deadlines. For many reporting companies the BOI reporting deadline was extended to January 13, 2025.
• On December 26, 2024, the Merits Panel of the Fifth Circuit Court of Appeals issued an order vacating the December 23, 2024, order from a different panel of the same court. Again, this order effectively reinstated the nationwide injunction from December 03, 2024.
• On December 27, 2024, FinCEN responded to the court’s December 26, 2024, order indicating once again that “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
• Also on December 27, 2024, the Fifth Circuit Court of Appeals scheduled oral arguments in the case for March 25, 2025.

Although these developments currently provide relief from mandatory BOI reporting for reporting companies, they do not constitute a final ruling.

The situation is extremely fluid and could change quickly. As such, reporting companies and impacted individuals should closely monitor developments affecting the BOI reporting requirements and either voluntarily file or be prepared to file if the injunction is once again lifted.

If you have questions or would like assistance with the CTA and BOI reporting, please contact Boyer & Ritter at BeneficialOwnerIR@cpabr.com.