Yesterday, we reported that the motions panel of the Federal Court of Appeals for the 5th Circuit decided, pending appeal, that reporting companies are required to file their beneficial ownership information with FinCEN no later than January 13, 2025. However, late yesterday, the merits panel of the same Court ordered a portion of the motions panel decision to be vacated, effectively reinstating the District Court’s December 3, 2024 preliminary injunction staying the enforcement of the Corporate Transparency Act (CTA) and its Reporting Rule.

To refresh, the injunction was issued in the case of Texas Top Cop Shop, Inc. v Garland (E.D. Texas, No. 4:24-cv-00478; December 3, 2024). The injunction allows companies that are subject to the CTA to delay compliance with the January 1, 2025 Beneficial Owner Information reporting deadline, pending further Order of the Court. Although the reporting deadline and enforcement have been enjoined, we encourage reporting entities to continue processing their Beneficial Owner Information reporting.

Effective January 1, 2024, the CTA became a federal law affecting all corporations, limited liability companies, limited partnerships and other entities registered with the Secretary of State of the state of formation. The CTA requires all reporting entities to register their beneficial ownership with the Financial Crimes Enforcement Network (FinCEN) database before the end of this year. FinCEN is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.

For more information or to discuss any questions you may have concerning your company and the CTA, please contact Joan Berg at [email protected] or call 312-648-2300.