Corporate Transparency Act Put On Hold
by Craig Gipson
Only weeks before the first January 1 deadline for Corporate Transparency Act (CTA) filings, a federal court in Texas issued a nationwide injunction against its implementation.[1]
When the CTA became effective in 2024, ECPA members were among millions of domestic and foreign businesses subject to new federal reporting requirements. The CTA requires that most companies doing business in the U.S. disclose certain information about their “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department.
Those requirements are now in limbo pending resolution of the current legal challenge. The Justice Department has appealed the injunction, creating uncertainty about whether or when the CTA may be reinstated. For now, the FinCEN website notifies users that “reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect.” However, reporting companies may continue to voluntarily submit beneficial ownership information reports which would place them in compliance if courts overturn the injunction on appeal.
For more on the CTA, the attorneys at Bird Loechl McCants & Holliday have provided this legal summary:
https://blmhlaw.com/corporate-transparency-act-beneficial-owner-information-reporting-requirements-take-effect-on-january-1-2024-what-business-entities-need-to-know-and-do/
For more information on beneficial ownership information reports, visit the FinCEN website at https://boiefiling.fincen.gov/.
Endnotes:
[1] Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-478 (E.D. Texas Dec. 3, 2024).
