On December 23, 2024, the 5th Circuit lifted a nationwide injunction that blocked enforcement of the Corporate Transparency Act, finding that the federal government is likely to prevail in a constitutional challenge to the disclosure law. Therefore, for entities that are created or first registered beginning in 2024, the report must be filed within 90 days of incorporation and for all other entities, the filing deadline is no later than January 1, 2025. For companies incorporated in 2025, that deadline will be 30 days from incorporation.

Previously, Judge Amos L. Mazzant III of the US District Court for the Eastern District of Texas issued a preliminary injunction blocking the US Treasury Department from enforcing the Corporate Transparency Act also known as the CTA. That nationwide injunction has now been stayed by the 5th Circuit and companies must now comply with the CTA filing deadlines pending the appeals process which is ongoing.

The CTA, which went into effect January 1, 2024, implemented uniform federal information disclosure requirements for domestic and foreign reporting companies registered to do business in the United States, unless otherwise exempt. The CTA requires such reporting companies to disclose to the Financial Crimes Enforcement Network (FinCEN) certain information about the company and its beneficial owners. The CTA is aimed at enhancing corporate transparency and combating financial crimes, particularly money laundering and terrorist financing. Noncompliance with the CTA may result in significant fines and prison terms.

Hanson Bridgett is monitoring the court proceedings for further developments. For further information about the Corporate Transparency Act, please visit our CTA Resource Center.