Update on the Corporate Transparency Act

By Michael High, Brittany Michaud, and Andrew Sweeney

December 9, 2024

In Client Alerts earlier this year (see Get Ready for the Corporate Transparency Act and The CTA: Time is Running Out) we advised our clients of their reporting obligations under the Corporate Transparency Act (the “Act”). We believe that many of you have made the required filings with the Financial Crimes Enforcement Network (FinCEN), while for others, your filings are due as of December 31, 2024.

Last week, a federal court in Texas issued a nationwide preliminary injunction prohibiting the enforcement of the CTA and its implementing regulations. FinCEN has posted the following statement on its website regarding enforcement of the CTA in light of the recent injunction:

“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.”

We will continue to monitor developments relating to this case under the CTA and its impact on your reporting obligations. Although the injunction provides a reprieve if you have not yet filed, it would be prudent to continue to assess your obligations under the CTA in the event the injunction is lifted.