Whiplash – Enforcement of the CTA is Blocked ... Again
What happened?
On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) vacated the stay of the Preliminary Injunction that was issued on December 23, 2024.
What does this mean?
The nationwide Preliminary Injunction issued by the U.S. District Court for the Eastern District of Texas on December 3, 2024, is once again in effect.
Pursuant to that Preliminary Injunction, the government is blocked from enforcing the Corporate Transparency Act (“CTA”) or its implementing regulations.
What now?
The enforcement of the CTA and its implementing regulations are once again on hold. Reporting companies do not have an obligation to comply with the CTA while the Preliminary Injunction is in effect but reporting companies can choose to voluntarily comply.
What is next?
In the coming weeks more information is expected from the Fifth Circuit and additional guidance will be forthcoming from FinCEN.
McGrath North will continue to monitor this fluid situation and provide updates as necessary. If you have any questions or if you need any assistance with CTA compliance, please don’t hesitate to contact your McGrath North attorney.
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