Corporate Transparency Act Enforcement Remains On Hold

January 24, 2025

Enforcement of the Corporate Transparency Act (the “CTA”) remains on hold, despite the decision by the U.S. Supreme Court on January 23, 2025 to stay a nationwide injunction against the CTA (McHenry v. Texas Top Cop Shop Inc., U.S., No. 24A653), as a separate nationwide injunction issued by Judge Jeremy Kernoodle of the of the U.S. District Court for the Eastern District of Texas on January 3, 2025, in a separate case challenging the validity of the CTA (Smith v. U.S. Department of the Treasury, E.D. Tex., 2025), remains in place.

Today, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) commented, “On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop). As a separate nationwide order issued by a different federal judge in Texas (Smith) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

It is important to note that the Supreme Court did not comment on the merits of the CTA and the Texas Top Cop Shop case will return for disposition in the United States Court of Appeals for the Fifth Circuit. However, FinCEN’s position is that reporting companies are not currently required to file beneficial ownership information. We encourage clients to reach out to their Seward & Kissel contacts for further information on the CTA as new developments emerge.