Injunction Stayed: Corporate Transparency Act Enforcement Resumes

The U.S. Department of Justice scored a victory in ongoing litigation over the constitutionality of the Corporate Transparency Act (CTA) when the Fifth Circuit Court of Appeals stayed the nationwide preliminary injunction issued earlier this month by a federal district court in Texas. 

The preliminary injunction issued by the Texas district court applied nationwide and prohibited the federal government from enforcing the CTA. The Fifth Circuit’s decision stayed the injunction and allows the federal government to continue enforcing the CTA while litigation in Texas Top Cop Shop, Inc., et al. v. Garland, et al. continues.

As a result of the Fifth Circuit’s decision, all companies that are “reporting companies” for purposes of the CTA must comply with the CTA and file beneficial ownership information reports as provided in FinCEN’s regulations.

The Fifth Circuit’s order is effective immediately. Neither the Court nor the federal government has extended the filing deadlines under the CTA as of the time of this publication. The filing deadlines for reporting companies remain in effect — January 1, 2025 for companies formed in 2023 or earlier and 90 days after formation for companies formed in 2024.