Client Alert: Corporate Transparency Act Reporting Continues to be Suspended

On January 2, 2025, FinCEN announced that it is once again temporarily suspending the mandatory reporting requirements under the Corporate Transparency Act (CTA) due to ongoing litigation regarding the constitutionality of the law. This is the result of an order issued on December 26, 2024 by the U.S. Court of Appeals for the Fifth Circuit which vacated the Fifth Circuit’s decision on December 23, 2024 to stay the nationwide injunction on complying with the CTA issued on December 3, 2024 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-00478 (E.D. Tex.). 

Our prior client alert on this subject can be found here: Client Alert: Corporate Transparency Act Beneficial Ownership Information Reporting On Hold – Sherin and Lodgen.

In vacating the stay of the injunction, the Fifth Circuit found that it wished “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.”  A hearing has been scheduled for March 25, 2025 where the Fifth Circuit’s merits panel will consider the DOJ’s appeal of the U.S. District Court’s ruling.

While there is no legal requirement to file under the CTA at this time, reporting companies may continue to voluntarily submit filings if they wish to do so. We continue to monitor developments in this evolving situation. Our recommendation to our clients is that they continue to prepare to comply with the CTA in the event it is reinstated by FinCEN.

If you have any questions concerning this Client Alert, please feel free to contact your regular contacts at the firm.