Corporate Transparency Act Reporting Requirements Still on Hold
January 3, 2025 by
Key Takeaway: Reporting companies are, once again, not legally required to make beneficial ownership reporting filings as initially required under the Corporate Transparency Act until the legal challenges wind their way through the court system.
Background: The Corporate Transparency Act (the “Act”) was enacted as part of the Anti-Money Laundering Act of 2020 to require beneficial ownership information reporting requirements for many businesses to combat illicit financial activities. The rollout of the Act has been anything but smooth as a result of multiple lawsuits filed in federal courts across the United States which challenged the scope of the Act and attempted to prevent enforcement of the reporting requirements against both individual plaintiffs and businesses in general.
Timeline: A timeline of some notable judicial events over the past month are as follows:
December 3, 2024 – As we reported last month, the reporting requirements under the Act were preliminarily deemed likely to be held unconstitutional and an injunction was issued by the U.S. District Court for the Eastern District of Texas preventing the enforcement of the Act’s reporting requirements.
December 23, 2024 – A three judge panel for the U.S. Court of Appeals for the Fifth Circuit granted an emergency motion by the U.S. Department of Justice staying the preliminary injunction and reinstating the Act’s reporting obligations.
December 26, 2024 – A ‘merits panel’ of the Fifth Circuit vacated its previous stay, reinstating the nationwide preliminary injunction and once again pausing the enforcement of the Act’s reporting requirements.
As a result of these actions, the deadlines for compliance with the Act’s reporting requirements are currently suspended. While oral arguments regarding enforcement are currently scheduled for the end of March 2025, businesses should stay informed about further developments to ensure timely compliance.
What’s Next?
The situation is evolving, and further updates from the courts could affect these requirements. Businesses can continue to make their filings in compliance with the Act or can choose to standby, once again, and watch as the courts determine the enforceability of the Act and its reporting requirements.
We’re here to help you navigate this process and keep you informed about any changes. If you have questions about the Corporate Transparency Act or need assistance regarding reporting requirements, don’t hesitate to reach out!
Joshua Mahaffey
jmahaffey@brownfoxlaw.comJoshua Mahaffey brings a wealth of real-world, corporate experience to his client engagements. Prior to practicing law Mr. Mahaffey spent over twenty years in the transportation and logistics industry, with an emphasis on risk management. He often engaged and collaborated…Read More
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Adam Fox
adam@brownfoxlaw.comAdam Fox co-founded Brown Fox and has emerged as a go-to confidant and wise counsel for business leadership, ranging from billion dollar companies to innovative start-ups.
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