On December 4, 2024, we reported a December 3, 2024, decision of the District Court for the Eastern District of Texas imposing a NATIONWIDE INJUNCTION against the enforcement of the reporting requirements of the Corporate Transparency Act.  We ended with a “Stay Tuned” for updates.  As expected, the Government appealed and challenged the Nationwide Injunction.  In a week which turned following Court Decisions into watching a Ping Pong Match, the 5^th Circuit Court of Appeals issued two rulings last week as follows:

MONDAY, DECEMBER 23, 2024: A panel (not all of the Judges for the 5^th Circuit Appellate Court) of the 5^th Circuit Court of Appeals issued an Order which provided a STAY OF THE INJUNCTION AGAINST CTA ENFORCEMENT – meaning that all pending reporting deadlines, including the deadline for entities created before January 1, 2024, to report by January 1, 2025, were back in place.  FinCen then issued guidance in response to this ruling providing a NEW DEADLINE for entities created before January 1, 2024, to file a Beneficial Ownership Information Report with FinCen by January 13, 2025.

THURSDAY, DECEMBER 26, 2024: Another panel of the 5^th Circuit reversed the 5^th Circuit ruling of three days prior and LIFTED THE STAY OF THE INJUNCTION AGAINST CTA ENFORCEMENT – which in essence takes us back to where we were on December 3, 2024, with an Injunction once again in place against FinCen’s enforcement of reporting obligations under the CTA.

FinCen Guidance – DECEMBER 27, 2024: In response to the December 26, 2024, 5^th Circuit Ruling, FinCen, on Friday, December 27, 2024, issued the following guidance:

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.

STATUS: The Government’s appeal of the December 3, 2024, Order is now scheduled to be heard on March 25, 2025.  With the broad guidance issued by FinCen on December 27, 2024 (previously, it was unclear if the Injunction would be read by FinCen to also apply to entities created on or after January 1, 2024), absent further Court activity, it appears we are in a respite period from CTA and no BOIR filings are due pending further Court activity.

Please continue to read the Frazer Ryan website for updates as we will post promptly when there is further activity impacting CTA reporting requirements and deadlines.