Federal Appeals Court Lifts Corporate Transparency Act Injunction; January 1 Deadline Reinstated

Capital Markets Emerging Companies & Venture Capital

On December 23, 2024, the United States Court of Appeals for the Fifth Circuit stayed the nationwide preliminary injunction issued on December 3, 2024, by U.S. District Court for the Eastern District of Texas. The injunction had blocked the Treasury Department from enforcing the beneficial ownership reporting requirements under the Corporate Transparency Act (the “CTA”) and stayed the January 1, 2025 compliance deadline. As a result of the Appeals Court’s action, the compliance deadline of January 1, 2025 has been reinstated.

What does this mean for reporting companies?

Reporting companies that have already filed their reports need not do anything. Reporting companies formed prior to January 1, 2024 should plan to submit their initial beneficial ownership reports to the Financial Crimes Enforcement Network (“FinCEN”) no later than January 1, 2025. Further developments in the case are possible, and FinCEN may issue guidance in the coming days.

Jonathan A. Greene is co-leader of the Banking & Financial Institutions practice group of Wyrick Robbins, and is also a member of the firm’s Capital Markets practice group. Wyrick Robbins publishes Client Alerts periodically as a service to clients and friends. The purpose of this Client Alert is to provide general information, and it is not intended to provide, and should not be relied upon as, legal advice.