3 Takeaways from the Injunction

1. CTA Reporting Reinstated: The Fifth Circuit Court of Appeals has lifted the injunction, reinstating beneficial ownership reporting (BOIR) requirements under the Corporate Transparency Act (CTA).
2. New Filing Deadlines: Businesses created before January 1, 2024, must file by January 13, 2025, with adjusted deadlines for companies formed during the injunction period.
3. Prepare for Compliance: With the deadlines back in effect, businesses should act now to gather ownership information and file promptly to avoid penalties.

The Fast-Moving Timeline & Key Dates for the BOIR Injunction

• December 3, 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-cv-00478). The ruling temporarily suspends enforcement of the Corporate Transparency Act (CTA), including its Beneficial Ownership Information Reporting (BOIR) requirements, effectively halting all compliance deadlines.
• December 5, 2024: The Department of Justice (DOJ) filed a Notice of Appeal, signaling its intent to challenge the injunction and resume enforcement of the CTA.
• December 12, 2024: The government submitted a motion to stay the preliminary injunction, asking the district court to temporarily pause its order while the appeal is ongoing. However, the district court criticized the government for failing to follow local rules when filing the request for emergency relief. Despite this, the court ordered the plaintiffs to file their response to the motion by noon on December 16, 2024.
• December 13, 2024: The DOJ escalated the matter by filing an Emergency Motion for Stay Pending Appeal with the Fifth Circuit Court of Appeals. In this motion, the government argued that the nationwide scope of the injunction is overly broad and should, at minimum, be limited to the companies directly involved in the case or the business association members involved in the lawsuit. The DOJ also emphasized the urgency of a ruling, proposing a December 27, 2024, deadline to ensure businesses have clarity about their compliance obligations ahead of January 1, 2025.
• December 13, 2024: On the same day, the Fifth Circuit issued an accelerated briefing schedule. The court instructed the plaintiffs (appellees) to file their response to the government’s motion by 5:00 PM on December 17, 2024. The government (appellants) was then ordered to file its reply by noon on December 19, 2024.
• December 23, 2024: In a decisive turn of events, the Fifth Circuit Court of Appeals granted the stay, effectively reinstating the CTA’s reporting requirements while the appeal proceeds.

What This Means for Businesses

The reinstatement of the CTA means beneficial ownership reporting is once again mandatory. The Treasury Department has issued revised deadlines to accommodate the period of uncertainty:

• Companies created before January 1, 2024, now have until January 13, 2025
• New deadlines apply for companies created during the injunction period
• Future companies must file within 30 days of registration

Constitutional Debate Continues

While the reporting requirements are back in effect, the underlying constitutional debate remains active. The plaintiffs argue the CTA exceeds Congressional authority and raises privacy concerns, while the government maintains the law is crucial for combating financial crimes and ensuring corporate transparency.

Multiple district courts, including those in Virginia and Oregon, have already upheld the CTA’s constitutionality, strengthening the government’s position.

Why the CTA Matters

The CTA plays a crucial role in safeguarding the U.S. and global financial systems from illicit activities like terrorist financing, money laundering, and drug trafficking. By requiring businesses to report their beneficial ownership, the law aims to close loopholes often exploited by bad actors, ensuring a level playing field for millions of law-abiding small businesses.

Despite the temporary suspension, the government remains committed to defending the CTA’s constitutionality. Both the U.S. District Courts for the Eastern District of Virginia and the District of Oregon have previously upheld the law.

Next Steps for Businesses

With reporting requirements reinstated, businesses should:

• Review their filing obligations under the revised deadlines
• Gather necessary beneficial ownership information
• Prepare to submit reports through FinCEN BOI Filing
• Stay informed about any further legal developments

The swift resolution of the injunction demonstrates the government’s commitment to implementing these transparency requirements. Businesses should act promptly to ensure compliance and avoid potential penalties.

How FinCEN BOI Filing Can Help

During the injunction, we paused our BOI filing services but have now resumed assisting businesses nationwide with this requirement. We are dedicated to helping businesses comply with the Corporate Transparency Act (CTA) and will continue to provide efficient support as the legal landscape evolves.

FinCEN BOI Filing has assisted thousands of businesses in navigating BOIR requirements efficiently. We’ve designed a streamlined form that allows most users to complete their BOIR in under 10 minutes while ensuring all business information is reported accurately and correctly.