Updated December 27, 2024
On December 3, 2024, a Texas Federal District Court issued a nationwide preliminary injunction halting enforcement of the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). Next, on December 23, 2024, the Fifth Circuit Court of Appeals lifted the injunction. This decision reinstated the Beneficial Ownership Information (BOI) reporting requirements for entities subject to the CTA.
In a surprising reversal, the Fifth Circuit Court of Appeals has now vacated its December 23, 2024, order that had lifted the previous nationwide injunction. This means the injunction barring enforcement of the CTA and its reporting requirements is once again in effect, at least for now. The Fifth Circuit Court of Appeals has also announced that it will hold expedited oral arguments to address this matter promptly, although no specific dates have been provided. The Fifth Circuit’s latest order, issued on December 26, 2024, can be read here.
To say this situation has been fluid would be an understatement. Over the past few weeks, we have seen significant legal back-and-forth over the BOI reporting requirements, leading to understandable frustration and confusion among affected entities. While we are professionals who take great care in monitoring and interpreting legal developments, even we feel like we’re getting dizzy watching this judicial game of ping-pong. We assure you, however, that our commitment to keeping you informed and prepared remains steadfast.
For now, entities are no longer required to file BOI reports, as the injunction prohibits enforcement of the CTA. However, given the rapid pace of these developments, it is entirely possible that another decision could alter this status once again. We urge all our clients to remain prepared to file, or to proceed with filing, as enforcement of the CTA may very well be reinstated yet again.
The CTA, as originally enacted, applies to most community, subdivision, and condominium associations, as well numerous other entities, by requiring them to disclose their beneficial ownership to the federal government. For more background on the CTA and its implications for associations, see our prior article here.
We will continue to monitor these developments and will provide updates as needed. Given how quickly things are evolving, this ruling might not be the last word on the CTA.
