If this feels like legal “whack-a-mole,” you’re not alone!
Yesterday, Thursday, December 26, the Fifth Circuit Court of Appeals issued an order vacating its earlier decision to stay the District Court’s preliminary injunction, which had enjoined the enforcement of the Corporate Transparency Act’s (CTA) compliance reporting deadlines. (See Corporate Transparency Act Reinstated by Fifth Circuit Court of Appeals)
The Fifth Circuit’s initial stay temporarily allowed enforcement of CTA deadlines while the case was under review. However, the Court has now reversed its earlier decision, explaining that its merits panel is expediting the case and needs to preserve the constitutional status quo until substantive arguments from both parties are fully considered.
The Court justified its reversal by stating:
“The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.”
We should expect an updated announcement from FinCEN as to filing requirements shortly.
If you wish to read about the ruling, it can be found on multiple news sites, including Forbes. The order itself can be read at https://www.ca5.uscourts.gov/opinions/unpub/24/24-40792..pdf.
NOTE: In the few hours since the decision, FinCEN has announced “In light of a recent federal court order, 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.” The notice can be found at https://fincen.gov/boi.