News and Events
Supreme Court Lifts Injunction on Corporate Transparency Act, But Requirements Still on Hold
On January 23, 2025, the U.S. Supreme Court ruled to lift the nationwide injunction that had blocked enforcement of the Corporate Transparency Act (CTA) in the matter Texas Top Cop Shop, Inc. v. McHenry. However, reporting requirements remain on hold in light of a separate nationwide injunction issued by a different Texas federal judge on January 7, 2025, in Smith v. U.S. Department of the Treasury.
What Does This Mean for Companies?
The Financial Crimes Enforcement Network (FinCEN) confirmed on its website (https://www.fincen.gov/boi) that reporting companies are not required to file beneficial ownership information (BOI) with FinCEN at this time; however, reporting companies may voluntarily submit BOI reports while the current injunction remains in force.
Although enforcement remains paused, reporting companies that have not yet filed would be prudent to continue to gather information, prepare to file, and monitor this evolving situation closely for updates.
A brief history of the CTA and how we got here can be found below and in our prior alerts.
Background on the Corporate Transparency Act
The Corporate Transparency Act, passed in 2021, is aimed at improving anti-money laundering efforts, combating terrorism, and preventing other illegal activities conducted through business entities. The law requires certain companies to report their beneficial ownership information to FinCEN. Most reporting companies were initially required to file their BOI reports by January 1, 2025.
However, the CTA faced legal challenges from the beginning:
- December 3, 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction suspending enforcement of the CTA's reporting requirements in Texas Top Cop Shop, Inc. et al. v. Garland et al. (now Texas Top Cop Shop, Inc. v. McHenry).
- December 23, 2024: The U.S. Court of Appeals for the Fifth Circuit issued a stay of the preliminary injunction, reinstating the reporting requirements. Following this, FinCEN extended the deadline for initial filings.
- December 26, 2024: The Fifth Circuit vacated the December 23 stay, once again pausing the CTA's beneficial ownership information (BOI) reporting requirements.
- December 27, 2024: FinCEN issued updated guidance advising reporting companies they are currently not required to file BOI with FinCEN, but may continue to do so voluntarily pending a ruling on their appeal.
- January 7, 2025: A different U.S. District Court in Texas issued a new nationwide injunction against enforcement of the CTA in Smith v. U.S. Department of the Treasury.
- January 23, 2025: The U.S. Supreme Court lifted the injunction halting enforcement of the CTA pursuant to Texas Top Cop Shop, Inc. v. McHenry; however, reporting requirements remain on hold due to the injunction in Smith v. U.S. Department of the Treasury.
For more information regarding the CTA and reporting requirements, please contact us.
