On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction, temporarily suspending the enforcement of the Corporate Transparency Act (CTA) and its corresponding regulations. The CTA, which requires certain businesses to file reports on beneficial ownership with the U.S. Financial Crimes Enforcement Network (FinCEN), was set to take effect on January 1, 2024. The ruling halts the deadline for filing beneficial ownership information, originally due by January 1, 2025, for existing companies.
Following this decision, the Department of Justice filed an appeal to the U.S. Court of Appeals for the Fifth Circuit on December 5. In response, FinCEN confirmed that it would comply with the court's order, suspending enforcement of the CTA as long as the injunction remains in place, though companies can still choose to voluntarily submit reports.
If the appeal is upheld or if higher courts intervene, the enforcement of the CTA may resume unexpectedly. Therefore, businesses are advised to stay informed as the legal process progresses.
Source: The National Law Review
Authors: Rosell, A., Patrick, P.
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