On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit reinstated the enforceability of the Corporate Transparency Act (CTA), and the preliminary injunction issued by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-CV-0478), has been lifted, effective immediately.
What This Means
The January 1, 2025, compliance deadline for reporting companies in existence as of January 1, 2024, is back in effect. Any reporting companies that have not done so already should file their initial BOI report by January 1, 2025.
What to Expect Going Forward
- At the time of this alert, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has not provided any guidance as to whether it will grant any relief regarding this deadline. Therefore, while there is a possibility the January 1, 2025, deadline will be delayed, companies should be prepared to comply with the year-end deadline.
- Companies should continue to stay apprised of ongoing developments. The plaintiffs in Texas Top Cop Shop may seek review from the Fifth Circuit or seek relief from the United States Supreme Court. Further, other federal courts currently are considering challenges against the CTA and may expedite their response in light of this recent change.
We intend to continue to provide further material updates as they unfold, including any responses to this recent court decision. For more information about the CTA, please visit our Corporate Transparency Act Resource Center and reach out to Ballard Spahr to discuss any questions you may have.
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