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Enacted in 2021, the federal Corporate Transparency Act (CTA) was intended to provide the federal government with insight into the “beneficial owners” of companies doing business in the United States. However, while the CTA was slated to take effect on January 1, 2024—and was in effect for a brief period of time—on December 3, 2024 a federal district court in Texas suspended enforcement of the CTA nationwide.
This suspension was short-lived, as a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit lifted it less than three weeks later. But following a series of subsequent court decisions, the suspension is now back in effect. As a result, enforcement of the Corporate Transparency Act is currently halted once again.
FinCEN Confirms that Corporate Transparency Act Reporting is Not Required
The U.S. Supreme Court affirmed the three-judge panel’s decision to reverse the suspension on January 23, 2025—and this is the most-recent development. However, while this particular case was pending before the Court, another federal judge in Texas issued a nationwide order prohibiting CTA enforcement. Since this order came in a separate case, it remains in effect despite the Supreme Court’s decision. As a result, on January 24, 2025, the Financial Crimes Enforcement Network (FinCEN) wrote:
“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.”
FinCEN’s statement specifically references the Supreme Court’s decision and the separate case in Texas. Thus, while the CTA’s reporting requirements could still be reinstated in the future, at present, companies are not required to file beneficial ownership information (BOI) reports with FinCEN.
Companies Should Prepare for the Possibility of Corporate Transparency Act Enforcement
Given that the Supreme Court has already ruled in favor of reinstating the Corporate Transparency Act reporting requirements once, it is reasonable to assume that companies will eventually need to begin complying with the CTA’s requirement to file BOI reports with FinCEN. Taking this—and the penalties for non-compliance—into account, companies should start preparing for the possibility of Corporate Transparency Act enforcement now.
If the CTA’s reporting requirements go back into effect, companies may need to file their BOI reports promptly in order to avoid violating the law. Our business lawyers are available to assist business owners and executives with assessing their companies’ obligations under the CTA, and we can assist with filing BOI reports if and when necessary.
Speak with a Business Lawyer at Rendigs in Confidence
Our firm is monitoring the court cases impacting enforcement of the Corporate Transparency Act, and we are prepared to assist our clients with submitting BOI reports should it become necessary to do so. To speak with a lawyer at our firm about your company’s obligations in confidence, please call 513-381-9200 or contact us online today.
