AM Law Alert Update : Government Appeals Federal Court’s Nationwide Injunction Against CTA
To supplement last week’s notice regarding the preliminary injunction against the enforcement of the Corporate Transparency Act (CTA): on December 5, 2024, the U.S. Government filed an appeal to the U.S. Court of Appeals for the Fifth Circuit seeking a stay of the U.S. District Court for the Eastern District of Texas’ nationwide injunction against enforcement of the CTA and its beneficial ownership reporting requirements.
Given this appeal, we recommend that clients still make preparations to collect beneficial ownership information for CTA compliance purposes even though entities are not currently required to comply with the CTA and will not be required to comply during the pendency of the appeal.
Although time horizons remain murky on when the Fifth Circuit will issue a ruling, we want clients to be aware of the possibility of a stay of the preliminary injunction, in which case the CTA reporting deadlines would snap back into application.
We will continue to monitor all updates regarding this appeal and will alert you in the event a ruling is made prior to year’s end.
For more information, please contact Conner Bourne.
Click here to learn more about the Corporate Transparency Act.
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