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Supreme Court Petition Filed to Reinstate Corporate Transparency Act (CTA) Enforcement
The Corporate Transparency Act (CTA) is paused for now – but the legal landscape may shift again soon.
Key Updates
- The January 13, 2025 deadline for initial Beneficial Ownership Information Reports (BOIR) remains suspended while the nationwide preliminary injunction is in effect.
- On December 31, 2024, the Department of Justice, on behalf of FinCEN, filed an Emergency Motion for Stay Pending Appeal with the United States Supreme Court to allow CTA enforcement to continue during the appeals process.
- Justice Samuel Alito has set a deadline of January 10, 2025, at 4:00 PM EST for plaintiffs to respond to FinCEN’s Supreme Court petition to reinstate the emergency stay.
- The Supreme Court’s decision on the emergency stay is expected shortly after the response deadline, but oral arguments on the preliminary injunction are still scheduled before the Fifth Circuit Court of Appeals on March 25, 2025.
On December 26, 2024, the United States Court of Appeals for the Fifth Circuit vacated its stay of the CTA’s preliminary injunction. This action again temporarily halts enforcement of the CTA, including the requirement for Reporting Companies to file BOIR, while the court evaluates the substantive legal challenges.
Timeline
- December 3, 2024: Federal District Court in Texas temporarily enjoined and halted the enforcement of the Corporate Transparency Act (CTA).
- December 23, 2024: The Fifth Circuit Court of Appeals Motions Panel issued an emergency stay of the District Court’s injunction and FinCEN announced a January 13, 2025 filing deadline.
- December 26, 2025: The Fifth Circuit Court of Appeals vacated the emergency stay, so that CTA enforcement was again halted.
- December 31, 2024: The Department of Justice, on behalf of FinCEN, petitioned SCOTUS to reinstate the stay. Full text of the Application here.
Currently, without the stay, the nationwide preliminary injunction halting CTA enforcement remains in effect, delaying Reporting Companies' requirement to file Beneficial Ownership Information Reports (BOIR).
ACTION: What This Means for Your Business
- Filing Deadlines Still Paused: Reporting Companies are not currently required to file BOIR or meet the January 13, 2025 deadline. Voluntary filings, however, remain an option.
- Prepare for Quick Changes: If SCOTUS reinstates the emergency stay, BOIR filing requirements could resume immediately. Ensure your documentation is organized to avoid last-minute compliance challenges.
- Stay Informed: Continue monitoring updates from legal and regulatory sources as the situation evolves.
Understanding the CTA and Its Impact
Effective January 1, 2024, the CTA aims to combat financial crimes by requiring certain business entities to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). While enforcement is on hold, businesses should use this time to prepare for potential compliance.
How Your Business Can Stay Ahead?
- Monitor Updates: Follow Porzio and reliable news sources to stay ahead of legal developments.
- Be Proactive: Organize your beneficial ownership information now, or consider filing voluntarily to stay ahead of deadlines.
- Seek Legal Advice: For tailored insights into how these changes impact your business, contact us at saprasla@pbnlaw.com.
Porzio will continue to monitor and provide updates as the legal situation evolves.
