Corporate Transparency Act Update
On December 3, 2024, a federal district court in the Eastern District of Texas granted a nationwide preliminary injunction that temporarily blocks the enforcement of the Corporate Transparency Act (CTA) based on questions regarding its constitutionality. On December 23, 2024, a 5th Circuit Court motions panel stayed the nationwide preliminary injunction and extended the filing deadline for existing reporting companies to January 13, 2025. The stay of the nationwide preliminary injunction was then vacated on December 26, 2024 by a 5th Circuit merits panel. Looking forward, the preliminary nationwide injunction may end in a permanent determination that the CTA is unconstitutional and cannot be enforced. Alternatively, courts could rule that the CTA is constitutional and that it will be enforced. Regardless of any court’s decision, we expect appeals to continue until there is a final unappealable judgment on the matter.
What this means for you: At this time you are not legally obligated to file a beneficial ownership report or comply with the CTA in any other way. However, the situation is fluid and the preliminary injunction could be struck down at any time. We do not know what CTA reporting deadlines will look like if the preliminary injunction is removed or the CTA is ruled constitutional. Our current general recommendation is that reporting companies continue to comply with the CTA. The filing is relatively simple for most reporting companies and delaying only results in extending uncertainty in your business planning. FinCEN’s beneficial ownership information reporting portal remains open at https://fincen.gov/boi.
The information in this article is not intended to provide legal advice. For professional consultation, please contact Saalfeld Griggs PC at (503) 399-1070 or visit www.sglaw.com. © 2024 Saalfeld Griggs PC