In a dramatic turn of events, a Fifth Circuit panel has reinstated the nationwide injunction blocking enforcement of the Corporate Transparency Act (the “CTA”) just three days after a separate panel of the Fifth Circuit had lifted it.

Thus, for now, reporting companies once again are not required to submit Beneficial Ownership Information Reports by the January 1st or January 13th deadlines. The appeal to the merits panel of the Fifth Circuit has been expedited and substantive guidance may be expected from the Fifth Circuit in the coming weeks.

Reporting companies should continue to gather beneficial ownership information to be prepared to file if the merits panel of the Fifth Circuit rules on behalf of the government.

Procedural History

The CTA requires companies created or registered to do business in the United States that existed prior to January 1, 2024 to disclose the identities of their beneficial owners (i.e., the individuals who own or control the company) by January 1, 2025.

Texas Top Cop Shop Inc. (a firearm retailer) and five other plaintiffs challenged the CTA in Texas federal district court resulting in an injunction being ordered on December 3 that halted enforcement of the CTA nationwide. The government promptly appealed the district court’s order to the Fifth Circuit.

On December 23, a panel of the Fifth Circuit that handles motions lifted the nationwide injunction, arguing that the government had made a strong showing that it was likely to succeed on the merits in defending the constitutionality of the CTA.  FinCEN subsequently pushed the deadline for filing Beneficial Ownership Information Reports from January 1, 2025 to January 13, 2025, for reporting companies that were in existence prior to January 1, 2024.

On December 26, the panel of the Fifth Circuit that will handle the merits of the government’s appeal reversed course once again and reinstated the nationwide injunction, arguing it is necessary “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” 

The December 26 Order of the Fifth Circuit can be read here.