NATIONWIDE INJUNCTION PAUSES CTA ENFORCEMENT
December 10, 2024
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We write regarding recent news relating to the Corporate Transparency Act (“CTA”) that impacts compliance obligations nationwide.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas (the “Court”) issued a nationwide preliminary injunction against the enforcement of the CTA and the related Beneficial Ownership Information (“BOI”) reporting rules. Pending further court order, the decision prohibits the U.S. Department of Treasury and the Financial Crimes Enforcement Network (“FinCEN”) from enforcing the CTA and its BOI reporting requirements. Unlike prior CTA lawsuits which were limited to specific litigants, the temporary injunction applies nationwide to all reporting companies.
The upshot is that reporting companies need not comply with the CTA’s reporting deadline at this time. For reporting companies who have not yet filed, there is no requirement to file currently. That said, FinCEN’s database is still accepting filings for those companies wishing to file voluntary submissions. Companies that already filed their initial BOI report with FinCEN are not required to file updated reports reflecting changes to previously submitted information. Prior to the Court’s decision, any changes to already filed BOI must have been submitted within 30 days of the change.
On December 5, 2024, the U.S. government appealed this decision to the United States Court of Appeals for the Fifth Circuit where the Court’s ruling could be reversed. Please note that if the nationwide preliminary injunction is lifted, reporting companies may be required to comply with the CTA and its BOI reporting requirements once again. To avoid any last-minute filing rush if the injunction is lifted, companies should continue to assess reporting obligations and collect BOI. Doing so positions a reporting company to promptly respond if circumstances change.
We will continue to monitor for updates or additional guidance. If you have any questions about how this decision impacts CTA compliance, please do not hesitate to reach out.
This Aviation Blog is intended to keep readers current on developments in the law. It is not intended to be legal advice. If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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