On December 26, 2024, the Fifth Circuit Court of Appeals reinstated a nationwide injunction against the enforcement of the Corporate Transparency Act (CTA), temporarily pausing the requirement for companies to disclose their Beneficial Ownership Information (BOI) to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

This decision reverses an earlier ruling by the same court, which had lifted the injunction and allowed the CTA’s enforcement to proceed. The reinstated injunction means that the January 13, 2025, deadline for companies to submit their BOI reports is currently on hold while the court decides the case.

Key Points to Know:

  • What is the Corporate Transparency Act?
    Enacted in 2021, the CTA requires corporations and limited liability companies to report information about their beneficial owners to FinCEN to combat financial crimes like money laundering.
  • Why was the injunction reinstated?
    The court seeks to maintain the status quo while considering constitutional arguments raised by opponents, who claim the law infringes on privacy and imposes unnecessary burdens on small businesses.
  • What does this mean for businesses?
    • January 13, 2025 Deadline on Hold: Companies are not required to file BOI reports until further notice.
    • FinCEN Enforcement Paused: The government cannot currently enforce the reporting requirements.

What Should Businesses Do Now?

  • Stay Informed: Monitor updates from the courts and FinCEN regarding the status of BOI enforcement.
  • Be Prepared: Remain ready to file BOI reports. Consult legal or compliance professionals to ensure readiness once a final decision is reached.

The Fifth Circuit’s decision underscores the complexity of balancing anti-money laundering efforts with privacy and regulatory concerns. Businesses are encouraged to remain proactive and adapt quickly as further developments unfold. We will continue to keep you updated if more information is released or if filing deadlines change.