Frankfurt Kurnit Klein & Selz

 
  • About Us
  • practice areas
  • Our Attorneys
  • Events & Education
  • News & Press
  • Careers
  • Alerts
    • Advertising Law
    • Art Law
    • Commercial Litigation
    • Employment Law
    • Entertainment Law
    • Estate Planning Law
    • Hospitality Law
    • Intellectual Property Law
    • Legal Ethics and Professional Responsibility
    • Privacy & Data Security Law
    • Regulatory
    • Restaurant Law
    • Sports Law
    • Technology Law
  • Published Articles
  • In the Press
    • Quoted
    • Praise
  • Press Releases

Sign Up for Alerts

Sign up to receive receive industry-specific emails from our legal team.

Sign Up.

Sign Up for Alerts

We provide tailored, industry-specific legal updates to our clients and other friends of the firm.

Areas of Interest

You will receive these updates in your email.

December 31st, 2024

Corporate Transparency Act Currently Unenforceable as Fifth Circuit Reinstates Nationwide Injunction

This is an update to our Corporate Alert issued on December 26, 2024.[1]

On December 26, 2024, a merits panel of the United States Court of Appeals for the Fifth Circuit reversed an earlier decision by a separate panel of the Fifth Circuit and vacated the stay of the preliminary injunction issued by the Eastern District of Texas preventing enforcement of the Corporate Transparency Act (“CTA”) and its beneficial ownership information (“BOI”) reporting rules.[2] The order reinstates the preliminary injunction issued by the Eastern District of Texas on December 3rd in Texas Top Cop Shop, Inc. v. Garland.[3] Accordingly, reporting companies are not currently required to file BOI reports with the Financial Crimes Enforcement Network (“FinCEN”).

The Fifth Circuit’s merits panel explained that it vacated the stay “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” The Fifth Circuit issued an expedited briefing and argument schedule, which requires briefing to be completed by February 28, 2025, and scheduled oral argument for March 25, 2025.

Shortly thereafter, FinCEN reissued the guidance it had published in response to the original injunction, stating that “reporting companies are not currently required to file [BOI reports] with FinCEN and are not subject to liability if they fail to do so while the [injunction] remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership reports.”[4]

The situation remains very fluid. At least for now, the Fifth Circuit’s latest ruling means reporting companies are not required to comply with the CTA and its BOI reporting requirements, although the Fifth Circuit or the Supreme Court could again restore enforceability of the CTA within a matter of days. We expect to see continued activity pertaining to the CTA in all branches of the government. There are additional cases challenging the CTA in courts across the U.S., and in Congress, legislation has been proposed to repeal the CTA or further delay its implementation. In addition, the incoming Administration’s position on enforcement of the CTA remains to be seen.

If you have questions, please contact Jeffrey Marks at (212) 826 5536 or jmarks@fkks.com, Jay Rand at (212) 705 4825 or jrand@fkks.com, Lee Silver at (212) 705 4826 or lsilver@fkks.com, Deborah Wolfe at (212) 826 5573 or dwolfe@fkks.com, Jonah Brill at (212) 705 4897 or jbrill@fkks.com, or any other member of the Frankfurt Kurnit Corporate Group.

-------------------------------------------------

[1] Corporate Transparency Act Back in Effect — Frankfurt Kurnit Klein & Selz

[2] Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir. Dec. 26, 2024). A copy of the ruling is available at https://www.ca5.uscourts.gov/opinions/unpub/24/24-40792.0.pdf.

[3] A prior alert explaining the Texas Top Cop Shop ruling is available at Federal Court Suspends Corporate Transparency Act Enforcement — Frankfurt Kurnit Klein & Selz.

[4] Beneficial Ownership Information Reporting | FinCEN.gov

Other

  • FRANKFURT KURNIT KLEIN & SELZ PC
    • About Us
    • Practice Areas
    • Our Attorneys
    • Events & Education
    • News & Press
    • Contact
  • contact us

    New York
    28 Liberty Street
    New York, NY 10005

    P  (212) 980 0120
    F  (212) 593 9175

    Email

    Los Angeles
    2029 Century Park East
    Los Angeles, CA 90067

    P  (310) 579 9600
    F  (310) 579 9650

    Email

  • legal
    • © 2025 Frankfurt Kurnit Klein & Selz PC
    • Privacy Policy
    • Disclaimer
    • Attorney Advertising
    • Check out FKKS on Facebook
    • Check out FKKS on Instagram
    • Check out FKKS on Twitter
    • Check out FKKS on Linked In