MVA White Collar Defense, Investigations, and Regulatory Advice Blog

Following up on our most recent blog post on developments regarding the enforcement date for the Corporate transparency Act (“CTA”), on December 26, 2024, the Fifth Circuit Panel that will ultimately be handling the merits of the appeal from the District Court issued an order vacating another order by a different Fifth Circuit panel on December 23, 2024 that had stayed the U.S. District Court for the Eastern District of Texas’ nationwide injunction on the beneficial ownership reporting obligations under the CTA. The aim of the rapid reversal is to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.

Following up on our most recent blog post on developments regarding the enforcement date for the CTA, on the afternoon of December 23, 2024, the Fifth Circuit issued its order staying the U.S. District Court for the Eastern District of Texas' nationwide injunction on the beneficial ownership reporting obligations under the CTA.

As a result, the reporting obligations under the CTA are now back in effect except to the extent enjoined for plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), with all entities existing prior to 2024 and all entities formed in 2024 being required to file. Recognizing that reporting companies may need additional time in light of the injunction previously in effect, FinCEN will require entities existing prior to 2024 and entities formed in September, 2024 who would have had to file during the period when the injunction was in effect to file their initial BOIR before January 13, 2025 (instead of before January 1, 2025 as originally required). Entities formed on or after December 3, 2024, which would have had to file within 90 days of formation have an additional 21 days to file (111 days in total in which to file).  See https://www.fincen.gov/boi for the full update.

We are continuing to monitor the situation, and will provide further updates when they become available.

As discussed in our prior blog post, on December 3, 2024, the U.S. District Court for the Eastern District of Texas (“District Court”) issued an order preliminarily enjoining enforcement of the Corporate Transparency Act and the associated beneficial ownership information reporting rules (the “CTA”) nationwide (the “preliminary injunction”).

On December 3, the U.S. District Court for the Eastern District of Texas (“Court”) entered a sweeping order enjoining enforcement of the Corporate Transparency Act and the associated beneficial ownership information reporting rules (the “CTA”) nationwide. The immediate effect: notwithstanding the CTA’s stated reporting deadline of December 31, 2024, no entity is currently required to file with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) information about itself, its owners or the persons otherwise controlling the entity.