In an unusual turn of events, the Fifth Circuit Court of Appeals has reversed itself and put the Corporate Transparency Act (CTA) back on hold.
On December 26, the merits panel of the Fifth Circuit Court of Appeals assigned to the case vacated the court’s motions panel, which had lifted the nationwide injunction that a Texas federal district court issued earlier this month blocking enforcement of the CTA. After the motions panel’s ruling, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) had extended the deadline for companies’ first mandatory filings of beneficial ownership information to January 13.
FinCEN now says "reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports."
In summary, the nationwide injunction is back in effect, the January 13 date no longer applies, and companies are not required to file at this time. Voluntary filings are being accepted by FinCEN.
Given all of the uncertainties, we recommend that every company at a minimum complete its analysis of the CTA's application to the company. If it determines that a beneficial ownership information filing would be required, it should gather the information and documents needed, so that it is positioned to quickly file if the injunction is overturned, vacated, or narrowed. We expect that some reporting companies will choose to voluntarily file rather than risk being subject to another quick deadline on short notice.
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