CTA Update

We previously reported that on December 3, a Texas district court issued a nationwide preliminary injunction temporarily enjoining enforcement of the Corporate Transparency Act (“CTA”). Significant developments have taken shape since that update.

The Department of Justice (“DOJ”) appealed the district court ruling and filed an emergency motion to lift the stay. A Fifth Circuit Court of Appeals panel granted DOJ’s emergency motion on December 23, 2024, which lifted the injunction, thereby reinstating the CTA and its Beneficial Ownership Information (“BOI”) reporting requirements. However, just three days later, a separate Court of Appeals panel reversed that decision, vacating the stay and reinstating the nationwide injunction.

But wait, there’s more.

On December 31, 2024, the DOJ submitted an emergency “Application for a Stay of the Injunction” to the U.S. Supreme Court. The nation’s highest court is now taking up the issue. In the meantime, Fifth Circuit oral arguments regarding the legal merits of the issue remain scheduled for March 25, 2025. Thus, unless the Supreme Court issues a ruling prior to March 25, 2025, the injunction will likely stay in place until at least that date.

At present, federal government guidance states that reporting companies may voluntarily submit Beneficial Ownership Information (“BOI”) filings but are not required to do so during the pendency of the injunction.

Separately, a bill was recently introduced in Congress which aims to eliminate the CTA. If passed, this would effectively render moot the ongoing legal dispute about the legality of the CTA.

If you need help navigating the complexities of the Corporate Transparency Act, our team is here to help. Contact Wright Beamer at 248.477.6300 to ensure you’re prepared for any developments.

Recent Blog Posts

Hold the Stage

Out of Sight, Out of Mind?

Small Business Series