On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit issued an order in Texas Top Cop Shop, Inc. et al. v. Garland et al., effectively pausing the beneficial ownership information (BOI) reporting requirements established by the Corporate Transparency Act (CTA).
Background:
- December 3, 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcement of the CTA’s reporting requirements (see Advisory for details).
- December 23, 2024: A panel of the Fifth Circuit issued a stay pending appeal of that preliminary injunction, reinstating the BOI reporting requirements (see recent Advisory for details).
- December 26, 2024: The Fifth Circuit vacated the December 23 stay, once again pausing the BOI reporting requirements.
Current Status:
As of now, the CTA’s reporting requirements are not in effect. However, the litigation is ongoing, and the government may seek further emergency relief, which could result in the resumption of these requirements.
Recommendations for Clients:
Given the uncertainty and the unpredictable nature of this litigation, we advise our clients to:
- Assess Applicability: Determine whether your company falls under the CTA’s reporting requirements.
- Prepare for Compliance: Be ready to file BOI reports with the Financial Crimes Enforcement Network (FinCEN) if the reporting requirements are reinstated.
Initially, the deadline for many companies to submit initial BOI reports was January 1, 2025. Following the December 23 decision, FinCEN extended certain BOI reporting deadlines. However, it is uncertain whether FinCEN would do so again if the reporting requirements are reinstated.
For more detailed information on the CTA, including reporting obligations and identifying beneficial owners, please refer to our previous Advisories or contact our office directly.
The CommLaw Group can help!
Contact us for assistance in navigating your company’s reporting obligations. Our team is ready to support you in ensuring full compliance with all relevant reporting requirements.
Michael Donahue — Tel: 703-714-1319 / E-mail: mpd@CommLawGroup.com
Diana James – Tel: 703-663-6757 / E-mail: daj@CommLawGroup.com
