Overview

The U.S. Court of Appeals for the Fifth Circuit issued an order late on December 26, reinstating the nationwide injunction against the enforcement of the Corporate Transparency Act (CTA). This decision once again places the January deadline for covered businesses to register their Beneficial Ownership Information (BOI) on hold. The Court indicated that a final ruling on the matter is forthcoming, confirming that no filings are required until a decision is reached.

Background

Earlier this month, the U.S. District Court for the Eastern District of Texas issued an order granting a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA), a law requiring certain businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). However, on December 23, the U.S. Court of Appeals for the Fifth Circuit temporarily lifted this injunction, allowing enforcement of the CTA’s reporting requirements to proceed while the government’s appeal was under review.

The decision was short-lived. On December 26, the same court reversed course and vacated its December 23 decision. The nationwide injunction blocking enforcement of the CTA has been reinstated, pausing the law’s requirements once again. The appeal is now under the jurisdiction of the Fifth Circuit’s merits panel, which has expedited the case and will soon issue a briefing schedule.

Next Steps

Businesses covered under the CTA should closely monitor legal developments, as the compliance deadlines and reporting requirements remain in flux. Additional updates will be shared as new information becomes available.

You can access the Fifth Circuit’s full ruling from December 26 here.

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