Beneficial Ownership Information Requirements Back on Hold…. Again.

On December 3, 2024, a federal district court in Texas entered an order enjoining enforcement of the Corporate Transparency Act (CTA) and its corresponding Reporting Rule.

The Government requested a stay of the preliminary injunction, which the district court denied.

The Government appealed, and on December 23, 2024, a motions panel of the United States Court for the Fifth Circuit granted the government’s emergency motion for a stay of the district court’s preliminary injunction meaning businesses once again had to comply with the CTA and its corresponding Reporting Rule.

However, in the latest twist, today (December 27, 2024), the merits panel of the Fifth Circuit Court of Appeals reversed course and vacated its own order from December 23, 2024, which had stayed enforcement of the district court’s preliminary injunction (enjoining enforcement of the CTA and the Reporting Rule). In short, for now, enforcement of the CTA and the corresponding Reporting Rule are on hold… again.

Obviously, this remains a very fluid and rapidly evolving situation. As we have consistently stated, businesses may wish to voluntarily comply with the CTA and Reporting Rule and go ahead and file the required reports given the level of uncertainty and the likelihood that compliance may very well be rushed if the law is eventually upheld.