Important Legal Update: Corporate Transparency Act - Ongoing Litigation Reinstates Injunction

As you know from our prior correspondence, the Financial Crimes Enforcement Network(“FinCEN”) recently extended the deadline for entities in existence prior to January 1, 2024 to file beneficial ownership reports under the Corporate Transparency Act (“CTA”) to January 13, 2025. Days later, a new panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Fifth Circuit’s previous stay of the injunction.

Accordingly, the injunction is back in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN. Though this ruling once again temporarily halts the CTA’s enforcement, we nonetheless advise that you prepare to timely file your entity’s report. The future of CTA reporting is ultimately uncertain; the injunction could still be reversed or superseded by other pending appellate litigation which could reinstate reporting requirements with short notice.

We will do our best to keep you updated as courts continue to carve out this issue. Nonetheless, in light of our concern that you may not receive timely information regarding the many ongoing developments in CTA litigation, we recommend that you file by the existing reporting deadline of January 13, 2025. If you don’t file by January 13, you should periodically check for updates regarding the status of the injunction and other relevant proceedings.

We encourage you to sign up to our blog posts and email notifications to stay updated on further proceedings. Although we endeavor to update our website and send periodic email updates to clients, we cannot ensure that you receive timely notice of a change in status that may require you to quickly submit a report if you choose not to file by the existing deadline. If you have concerns about filing, would like to more thoroughly evaluate compliance risks, or have any other questions or concerns, please reach out to counsel.

J. Thomas O'Brien, Jr. heads the firm's mergers and acquisitions (M&A) team and serves as outside general counsel to many of the firm's clients. Tom frequently counsels business owners in entity formation and exit strategy planning.
Email: tobrien@spottsfain.com
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Edward B. Lumpkin works with a broad range of for-profit and non-profit organizations, from start-up ventures to public companies, on a wide variety of matters, with an emphasis on mergers and acquisitions, joint ventures, franchising and licensing arrangements and general corporate, regulatory and securities matters.

Sam Cerchio works is an Associate in the firm's Business and Litigation sections, and focuses her practice on general corporate matters. Prior to joining the firm as an attorney, Sam spent two years working as a law clerk with Spotts Fain. She also served as a Judicial Intern for the Honorable Judge Henry. E. Hudson at the U.S. District Court for the Eastern District of Virginia.
Email: scerchio@spottsfain.com