The 5th Circuit Court of Appeals recently issued a significant ruling halting the enforcement of the Corporate Transparency Act (“CTA”), which had been set to require businesses to disclose corporate and personal information by January 13, 2025. This decision marks a dramatic reversal, following a prior ruling just days earlier that had reinstated the reporting requirements. The new halt came after a December 26 ruling by another 5th Circuit panel, which reinstated a nationwide injunction to preserve the status quo while the court reviews the substantive arguments in the case. A hearing is scheduled for March 2025, with briefing schedules set for February.
The CTA, passed by Congress in 2021, mandates that companies report their beneficial ownership information (“BOI”) to the government, with an initial compliance deadline set for January 2025. However, due to ongoing legal challenges, the law’s reporting obligations have been suspended for now. The Texas federal court initially blocked the requirements in December 2024, and while the 5th Circuit revived them briefly, the latest ruling has once again put those obligations on hold. As a result, businesses currently do not have to submit any BOI reports, including those for entities formed before January 1, 2024.
Despite the temporary reprieve, businesses are advised to stay vigilant and prepared for potential future changes. While reporting is not mandatory at this time, companies can still choose to submit BOI reports voluntarily. Legal uncertainty surrounding the CTA means that the law could be revived if the injunction is lifted, and businesses should monitor ongoing developments closely to ensure readiness for future compliance if needed.
For any questions or assistance in keeping your business compliant, please contact us at info@mnklawyers.com
