Injunction on Corporate Transparency Act Reinstated 

New Developments on the Corporate Transparency Act Injunction:

We want to ensure you are promptly informed of key developments in the legal landscape concerning the Corporate Transparency Act (CTA). On December 26, 2024, the 5th Circuit Court of Appeals issued a significant ruling that impacts the current enforcement of the CTA.

Key Update:

Earlier this week, we informed you that the reporting requirements under the CTA had been reinstated. In a whiplash-like move on December 26, 2024, the 5th Circuit Court of Appeals vacated its prior decision to stay the nationwide preliminary injunction enjoining enforcement of the CTA. As a result, the nationwide injunction against the enforcement of the CTA is currently back in effect pending further legal proceedings.

What This Means for You:

At this time, the injunction prohibits enforcement of the CTA. However, given the uncertainty and the possibility of further legal developments, we are adjusting our approach to BOI Report filings as follows:

– For Clients Wishing to File: We will continue to complete filings for those who prefer to proactively submit their Beneficial Ownership Information (BOI) Reports.

– For Clients Wishing to Wait: Prepare to file quickly but do not file unless and until the injunction is lifted.

Why Did the 5th Circuit Reverse Its Earlier Decision?

This series of events stems from two simultaneous legal processes within the 5th Circuit:

– Government’s Motion to Stay the Injunction: A 3-judge motions panel initially granted the government’s request to stay the nationwide injunction, effectively allowing the CTA enforcement to proceed.

– Plaintiffs’ Petition for En Banc Review: The plaintiffs then filed a petition requesting an en banc review, meaning all 17 judges of the 5th Circuit would review the case. While this petition is under consideration, a separate 3-judge merits panel reinstated the injunction to “preserve the constitutional status quo.”

This unusual procedural development underscores the complexity of the case and suggests the legal situation remains fluid. The ultimate outcome—whether the injunction will stay in place or be lifted—is still unclear.

Next Steps:

We are closely monitoring this case and will provide timely updates as additional information becomes available, including any rulings by the 5th Circuit regarding the en banc petition or subsequent appeals.

If you have any questions about how this affects your filing obligations or would like to adjust your filing posture, please do not hesitate to reach out to our team.

Authored By:
Timothy Berg
Paul Cliff
Stephen Good
David McCarville
Zaki Robbins
Chris Walther
Doug Youmans
Jeff Zucker