The ongoing legal developments surrounding the Corporate Transparency Act (CTA) are confusing, but as of January 1, 2025, no business is required to file a report.
On December 3, 2024, a Federal district court in Texas had entered an order stating that enforcement of the CTA would be temporarily halted and that no business had to comply with the 1/1/25 deadline.
Then, on December 23, 2024, a panel from the Fifth Circuit Court of Appeals granted the government's motion to stay the injunction imposed by a U.S. District Court in Texas Top Cop Shop v. Garland. This reinstated the CTA filing requirements, requiring reporting companies to file beneficial ownership information (BOI) with the Financial Crimes Enforcement Network (FinCEN).
But, on December 26, 2024, a separate panel of the Fifth Circuit vacated the stay of the injunction. This effectively restored the District Court's injunction and halted enforcement of the CTA while the government's appeal remains unresolved.
What does this mean for you?
As of December 26, 2024:
Reporting companies are not required to file BOI reports with FinCEN during the pendency of the appeal.
FinCEN has encouraged reporting companies to voluntarily submit BOI reports but has clarified that doing so is optional.
Recommendations for Reporting Companies:
Retention of BOI Information: Reporting companies should maintain their BOI data to ensure compliance if the CTA is reinstated in the future.
Monitor Legal Updates: As the legal status of the CTA evolves, companies must stay informed about deadlines and filing requirements that could change based on judicial rulings.
If you need guidance on navigating the CTA requirements or related compliance obligations, feel free to reach out!
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