Corporate Transparency Act Reporting On Hold Again

On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a stay pending appeal of the preliminary injunction issued by the U.S. District Court for the Eastern District of Texas in the case of Texas Top Cop Shop, Inc. v. Garland, that, as we noted in our December 2024 Sidebar, had temporarily blocked enforcement of the beneficial ownership reporting requirements under the Corporate Transparency Act (the “CTA”). However, on December 26, 2024, a second panel of the Fifth Circuit vacated that stay and reinstated the nationwide preliminary injunction enjoining enforcement of the CTA. Accordingly, no reporting is currently required under the CTA and the extended reporting deadlines announced by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) in the wake of the December 23 court order have been withdrawn.

While these developments are important for reporting companies, they do not constitute the conclusion of the legal challenges in the Texas Top Cop Shop, Inc. case or the case of National Small Business United, d/b/a The National Small Business Association, et al. v. Yellen, et al., pending in the U.S. District Court for the Northern District of Alabama, both of which are being appealed. In the meantime, entities should consider undertaking the analyses required to determine their reporting requirements under the CTA so that they may be prepared to file their beneficial ownership information if the CTA is reinstated. The attorneys at Poole Shaffery would be happy to assist you with your CTA analyses and filings.