Corporate Transparency Act Update: It’s Not April Fools Yet But It Kinda Feels Like It….

By: Amanda Messa, General Counsel, LEMOINE

I’m starting to think the courts are either (a) secretly conspiring to keep in-house counsel guessing as to whether they need to carve-out time to focus on Corporate Transparency Act (CTA) filings or (b) trying to increase Division 11’s blog activity on The Connector.  Either way, here’s a quick update on the latest in the CTA legal saga – the gift that just keeps on giving.  On January 23, 2025, in the Texas Top Cop Shop case, the United States Supreme Court granted the Government’s request to stay the nationwide injunction on the enforcement of the CTA issued by the United States District Court for the Eastern District of Texas, Sherman division.  On its face, this ruling appeared to allow enforcement of the CTA by FinCEN (Financial Crimes Enforcement Network).  The ruling did not go to the underlying merits of the dispute surrounding the CTA but rather was procedural in nature.  The substantive issues in that case are scheduled to be taken up by the Fifth Circuit Court of Appeals in the coming months. 

Late last week, FinCEN posted the following update on its website clarifying that companies are not currently required to file beneficial ownership information because of a separate nationwide order issued in Texas:

“As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) 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.”

The bottom line is there continues to substantial uncertainty surrounding enforcement of the CTA with multiple ongoing legal battles and now a new presidential administration.  If you haven’t already allocated time to dig in on applicable exemptions and filing requirements, it looks like it’s probably time to pour yourself a large cup of coffee and engage in some light reading on the subject.