In my newsletter of October 2023, I informed you of the Corporate Transparency Act and its requirement that corporations, limited liability companies and other entities created or registered to do business in the United States, with limited exceptions, report information about the beneficial owners of the entity. https://magdaabdogomezlaw.com/new-filing-requirements-for-many-businesses/  Under the Act entities which were required to report that were created, or registered to do business prior to January 1, 2024, had until January 1, 2025 to file the required information regarding beneficial owners. But much has happened since my last writing.

On December 3, 2024, in the case of Texas Top Cop Shop, Inc. et al. v. Garland et al., the US District Court for the Eastern District of Texas issued a nationwide preliminary injunction against enforcement of the Act’s reporting requirements. As a result of the court’s holding, entities did not have to disclose their beneficial owners, as required by the Act.

On December 23, 2024, a panel of the Fifth Circuit Court of Appeals issued a stay pending appeal of that preliminary injunction. As a result, entities subject to the Act were required to comply with its terms and disclose their beneficial owners. In response to the court’s ruling, the US Department of the Treasury extended the January 1, 2025 reporting date to January 13,2025.

On December 26, 2024, the Fifth Circuit Court of Appeals issued an order vacating the stay issued on December 23. Therefore, as of this writing, the requirement that entities subject to the Act disclose beneficial owners is again paused. The Department of Justice may seek additional emergency relief from the Fifth Circuit or from the US Supreme Court.

If the Act applies to you, it might be wise to be ready to comply with the Act’s disclosure requirements. Should the DOJ seek and obtain emergency relief from the Fifth Circuit’s order pausing the Act, there is no guarantee that the January 13, 2025 deadline to register will be extended.