On December 3, 2024, a federal court in Texas issued a nationwide preliminary injunction to temporarily suspend enforcement of the Corporate Transparency Act (the CTA) and its Beneficial Ownership Information (BOI) reporting rule. Then the 5th Circuit issued a stay of the preliminary injunction (effectively reinstating the rule). However, on December 26, a different panel of the 5th Circuit reinstated the injunction, once against pausing enforcement of the CTA.
Although this ruling means that companies will not be penalized for failing to file BOI reports or meet the FinCEN deadlines, the injunction is not a final order and the ruling has been appealed. Therefore, the injunction may be reversed and the deadlines reinstated. FinCEN has stated that while it will comply with the temporary injunction, it will also continue to accept BOI reports filed voluntarily.
Because the injunction is not currently permanent and the future of the CTA is uncertain, we recommend that all clients formerly subject to the BOI reporting requirements continue to gather the required information and consider voluntarily filing BOI reports.
We will continue to monitor the legal status of the CTA and BOI requirements closely, and will provide updates as they become available.
