In a sudden U-turn, the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) on December 26th vacated its own stay Order that it issued just days earlier on December 23rd concerning enforcement of the Corporate Transparency Act (CTA) requirement for most U.S. companies to file beneficial ownership reports. A different panel of the Fifth Circuit (the merits panel) justified reversing the stay Order (issued by a motions panel) and reimplementing the lower court’s December 3rd CTA preliminary injunction by explaining that the court must first consider the substantive constitutionality arguments of the case before it can allow enforcement of the CTA.
Now, with the Fifth Circuit’s decision to vacate the stay Order, there will be no CTA enforcement until the Fifth Circuit has considered the merits of the case and potentially grants the U.S. government’s request to stay the injunction. Thus, until further notice, companies are not required to file beneficial ownership reports with FinCEN.
