Publication

17 January 2025

Year-End Chaos Pushes CTA to the Brink

The Corporate Transparency Act (CTA) has been the subject of numerous legal challenges over the past year, culminating in a series of on-again, off-again injunctions, reinstatements and stays, and ultimately reverting to a nationwide injunction on CTA enforcement on December 26, 2024. Currently, Justice Alito is considering the Government’s application to the Supreme Court for a stay or, alternatively, a narrowing of the injunction. Before recapping the recent developments, let us be clear on the current status of the CTA as of January 17, 2025.  Reporting companies nationwide do not need to comply with the CTA at this time.

That said, FinCEN continues to accept voluntary beneficial ownership filings, and many companies — especially those with more complex ownership and management structures — continue to prepare for the possible reinstatement of CTA enforcement.  This reinstatement could result from Supreme Court action to stay or otherwise limit the scope of the present nationwide injunction in the relatively near-term.

If the Supreme Court declines the government’s application for emergency relief, CTA enforcement would likely remain enjoined at least until further decision by the U.S. Court of Appeals for the Fifth Circuit. Meanwhile, the U.S. Chamber of Commerce, together with many State and local chambers, are lobbying Congress to extend the CTA’s statutory filing deadline to January 1, 2026.

Additional factors that may impact the future of the CTA are the change in Presidential administrations, the sharpened focus on the CTA by various political actors and organizations, and supplemental authority and commentary provided to the Supreme Court (through amicus brief filings).

Until there is a final decision on CTA enforcement—either through court ruling or legislative action, CTA filings remain voluntary.  We encourage you to monitor the latest developments, engage with your local chamber of commerce and business association contacts, and consult your Miller Johnson attorney if you have any questions or concerns.

For reference, below is a timeline of the key (and rapid) developments since the nationwide injunction was first issued on December 3, 2024. It is no surprise that many reporting companies are feeling anxious and confused about what to expect next.  Miller Johnson is here to help.

Recent CTA Developments

  • December 3, 2024: The U.S. District Court for the Eastern District of Texas enjoins CTA enforcement nationwide
  • December 5, 2024: The Government files a Notice of Appeal.
  • December 6, 2024: FinCEN announces that reporting companies are not required to file beneficial ownership reports while the nationwide injunction is in effect, but clarifies that voluntary submissions may continue.
  • December 11, 2024: The Government files a motion to stay the injunction pending appeal, effectively asking the District Court to lift its own injunction while it appeals the ruling.
  • December 13, 2024: The Government files an emergency motion with the Fifth Circuit to stay the District Court’s injunction.
  • December 17, 2024: The District Court denies the Government’s December 11 motion, leaving the nationwide injunction in place unless/until the Fifth Circuit issues a contrary order.
  • December 23, 2024:
    • A motions panel of the Fifth Circuit grants the Government’s emergency motion for a stay pending appeal, temporarily lifting the pause on the law’s enforcement.
    • FinCEN briefly postpones most CTA reporting deadlines.
  • December 24, 2024: Plaintiffs request an emergency rehearing en banc from the Fifth Circuit.
  • December 26, 2024: A merits panel of the Fifth Circuit vacates the December 23 motions panel stay, reinstating the nationwide injunction on CTA enforcement.
  • December 27, 2024:
    • The Fifth Circuit issues an expedited schedule with key briefing and oral argument dates in February and March 2025, respectively.
    • FinCEN communicates that reporting companies are not required to file beneficial ownership reports while the nationwide injunction is in effect, again clarifying that voluntary submissions are allowed.
  • December 31, 2024: The Government applies to the U.S. Supreme Court for a stay of the nationwide injunction, which is submitted to Justice Alito.
  • January 3, 2025: Justice Alito requests a response to the Government’s application by January 10, 2025.
  • January 10, 2025: Respondents file response to Government application.
  • January 13, 2025: Government files reply to respondents’ response.