Corporate Transparency Act: “Stay” Put
On January 23, 2025, the U.S. Supreme Court granted the U.S. government’s motion to stay a nationwide injunction prohibiting enforcement of the Corporate Transparency Act (“CTA”). Because a separate nationwide injunction order issued by a different U.S. federal court is still in place, the Financial Enforcement Crimes Network (“FinCEN”) has stated that it will continue to not enforce the CTA for the time-being. As a result, reporting companies are still not currently required to file beneficial ownership information with FinCEN. FinCEN has issued a statement that reporting companies also are not subject to liability if they fail to file this information while the other injunction order remains in force. FinCEN will continue accepting reports on a voluntary basis.
As a result of these updates, the following recommendations should be considered for reporting companies that are not exempt from reporting under the CTA:
1. Continue Preparation: Although the immediate filing obligation is suspended, reporting companies should continue gathering all necessary information and documents required by the CTA.
2. Stay Informed: Monitor updates from the courts, relevant government agencies, or legal advisors regarding the status of the injunction and any changes to reporting requirements.
3. Be Ready to File: Maintain a state of readiness to submit reports quickly if the injunction is lifted or modified.
4. Seek Legal Advice: Consider consulting with legal counsel to understand the specific implications for your organization and to develop a compliance strategy. Reporting companies may still voluntarily submit beneficial ownership information reports with FinCEN which should be evaluated.
In conclusion, while there is still an injunction in place that provides a temporary reprieve from CTA reporting obligations, it's crucial for potentially affected entities to remain vigilant and prepared. The legal landscape surrounding the CTA is rapidly evolving, and further developments are likely in the coming weeks and months. We continue to be available for your CTA questions.
As a result of these updates, the following recommendations should be considered for reporting companies that are not exempt from reporting under the CTA:
1. Continue Preparation: Although the immediate filing obligation is suspended, reporting companies should continue gathering all necessary information and documents required by the CTA.
2. Stay Informed: Monitor updates from the courts, relevant government agencies, or legal advisors regarding the status of the injunction and any changes to reporting requirements.
3. Be Ready to File: Maintain a state of readiness to submit reports quickly if the injunction is lifted or modified.
4. Seek Legal Advice: Consider consulting with legal counsel to understand the specific implications for your organization and to develop a compliance strategy. Reporting companies may still voluntarily submit beneficial ownership information reports with FinCEN which should be evaluated.
In conclusion, while there is still an injunction in place that provides a temporary reprieve from CTA reporting obligations, it's crucial for potentially affected entities to remain vigilant and prepared. The legal landscape surrounding the CTA is rapidly evolving, and further developments are likely in the coming weeks and months. We continue to be available for your CTA questions.
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