Corporate Transparency Act – Nationwide Injunction Reinstated by Fifth Circuit

01.10.2025

For those following recent developments regarding the Corporate Transparency Act, and its Beneficial Ownership Information reporting requirements, the last month has been a dizzying rollercoaster. As of the date of this alert, the nationwide injunction preventing the enforcement of the CTA and its BOI reporting requirements has been reinstated by the Fifth Circuit Court of Appeal, meaning that “Reporting Companies” (as defined in the CTA) are currently not required to file BOI reports. However, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) continues to accept voluntary BOI submissions.

Reverse, Reverse

On December 26, 2024, just days after issuing an order lifting the nationwide injunction preventing enforcement of the CTA and the Reporting Rule, the Fifth Circuit promptly reversed course and vacated the order, thus reinstating the district court’s preliminary injunction. Notably, the Fifth Circuit, in its order reinstating the injunction, stated:

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.

Readers of our December 26, 2024 Client Alert will recall that the Fifth Circuit faced pointed criticism for its original order staying the injunction, on the basis that lifting the injunction would force businesses to comply with potentially unconstitutional and highly invasive reporting requirements while the issue of the CTA’s constitutionality remained unsettled.

Recommended Action

Given the extremely volatile and uncertain state of affairs regarding the CTA and its BOI filing requirements, Reporting Companies should strongly consider continuing to gather required information for BOI reporting and maintain readiness to file BOI reports in case the injunction is stayed on short notice. While it is likely that in the event the BOI reporting requirements are reinstated, FinCEN may institute an extended deadline or grace period for enforcement, Reporting Companies should not count on such developments.

Reporting Companies should take note that failure to timely file a BOI report can result in significant penalties (including civil and criminal penalties), so it is critical that Reporting Companies satisfy their reporting obligations under the CTA.

Please refer to our December 29, 2023 Client Alert that includes a detailed explanation of the CTA BOI Report requirements, here.