CTA UPDATE – Fifth Circuit Lifts Nationwide Preliminary Injunction

On December 23, 2024, the Fifth Circuit Court of Appeals lifted the District Court’s nationwide preliminary injunction against enforcement of the Corporate Transparency Act (CTA) in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.). For background on the litigation, please see our earlier publication.

As a result, the following CTA deadlines are once again enforceable against reporting companies:

• Companies in existence prior to January 1, 2024 must file their initial beneficial ownership information (BOI) reports by January 1, 2025.
• New companies formed between January 1, 2024 and December 31, 2024 must file their initial BOI reports within 90 days after formation. Companies formed on or after January 1, 2025 must file their initial BOI reports within 30 days after formation.
• A company that was formed prior to 2024 and was in existence on or after January 1, 2024 but ceased to exist prior to the January 1, 2025 deadline for filing initial BOI reports nonetheless must file an initial BOI report by the January 1, 2025 deadline, even if the filing is made after the company has ceased to exist. Similarly, a company that was created in or after 2024 but ceased to exist prior to the applicable 90-or 30-day deadline for filing initial BOI reports nonetheless must file an initial BOI report within 90 or 30 days of its formation, as applicable, even if the filing is made after the company has ceased to exist.
• Companies must report changes to the information previously submitted to FinCEN concerning the company or its beneficial owners within 30 days after the change.

For background on the CTA, please see this click here.

Despite the resulting imminent deadlines and the serious penalties for noncompliance, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has not as yet indicated that it plans to extend the deadlines. On the contrary, in the government’s emergency motion asking the Fifth Circuit to stay the preliminary injunction, the government asked the Fifth Circuit to issue a decision by no later than December 27 so as “to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.”  Under the circumstances, it seems likely that the government’s position will be that reporting companies must meet existing deadlines. Reporting companies should continue to monitor proceedings in the litigation and further guidance issued by FinCEN.

Please contact one of the authors of this alert or your regular Vorys contact attorney for more information about CTA compliance.