Corporate Transparency Act Enforcement on Hold… Again

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports. Recent notable developments concerning the enforcement of the Corporate Transparency Act (CTA) include:

Recent Court Rulings:

• On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in the case of Texas Top Cop Shop, Inc. v. Garland, et al. No. 4:24-cv-00478 (E.D. Tex.), temporarily blocking the enforcement of the CTA.
• The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024, seeking a stay of the injunction pending the appeal.
• On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction, reinstating the CTA reporting requirements.
• On December 26, 2024, a different panel of the Fifth Circuit vacated the stay, thereby reinstating the injunction.

On December 26, 2024, FinCEN confirmed on its BOI webpage that reporting companies currently are not required to file beneficial ownership information with FinCEN.

What This Means for Your Business: 

As of now, reporting companies are not required to file beneficial ownership information with FinCEN due to the temporary injunction. However, we recommend that you stay informed about any further legal developments and be prepared for potential changes in the enforcement of the CTA.

Next Steps:

• Stay Informed: Monitor updates from the Department of the Treasury and FinCEN regarding the CTA.
• Review Compliance Requirements: Understand the specific reporting requirements under the CTA and gather the necessary documentation for beneficial ownership information in the event the temporary injunction is vacated or a permanent injunction is not granted.
• Consult Legal and Compliance Experts: Seek advice from professionals to ensure your company is fully prepared to meet the CTA requirements.
• Voluntary Compliance: Consider voluntarily submitting beneficial ownership information reports to FinCEN to demonstrate your commitment to transparency and compliance.

We will continue to keep you updated on any further developments. If you have any questions or need assistance, please do not hesitate to contact us.