Summit Law Blog

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an order granting a nationwide preliminary injunction that halted all required filings pursuant to the CTA. In response, the U.S. Department of the Treasury filed a Notice of Appeal and an emergency motion with the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) to stay the preliminary injunction.

On December 23, 2024, the Fifth Circuit granted the emergency motion for a stay of the preliminary injunction pending appeal. The Fifth Circuit stated that, “the government has made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.” The Fifth Circuit’s ruling permitted enforcement of the CTA and associated reporting rules while the appeal was pending. With the preliminary injunction stayed, reporting companies were once again required to comply with the CTA’s reporting requirements. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), which enforces the CTA, had announced significant updates to the reporting deadlines for beneficial ownership information (“BOI”), as follows:  

• Entities Formed Prior to January 1, 2024: Reporting companies created or registered before January 1, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN.
• Entities Formed Between September 4, 2024 and September 24, 2024: Reporting companies in this category with a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial BOI reports with FinCEN.
• Entities Formed Between December 3, 2024 and December 23, 2024: These reporting companies have an additional 21 days from their original filing deadline to file their initial BOI reports with FinCEN.
• Entities Formed On or After January 1, 2025: Reporting companies created or registered on or after January 1, 2025 have 30 days to file their initial BOI reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

However, on December 26, 2024, the Fifth Circuit vacated the part of their prior order that had granted the emergency motion to stay the preliminary injunction. The Fifth Circuit explained, “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining the enforcement of the CTA and the Reporting Rule is VACATED.”  As a result, reporting companies are once again NOT required to file initial BOI reports with FinCEN unless and until the preliminary injunction is stayed (again) or otherwise lifted.

Stay tuned for the latest developments on the CTA, as there will undoubtedly be further updates in the coming weeks! If you have any questions about the CTA, please contact Angela A. Hill at angelah@summitlaw.com or (206) 676-7086.