CTA
January 09, 2025
CTA Reporting Voluntary while U.S. Supreme Court Reviews Injunction
Corporate Transparency Act
On December 31, 2024, the government filed an application with the Supreme Court to stay the injunction that paused compliance with the Corporate Transparency Act (CTA). In its brief, the government argued that the U.S. District Court for the Eastern District of Texas lacked the authority to issue a nationwide injunction that affected the rights of entities not party to the litigation. The Court responded by requesting that the Plaintiffs in the case file a response by January 10, 2025. With oral argument on the merits of the appeal scheduled for March 25, 2025, we believe there is a good chance that the Court leaves the injunction in place pending further proceedings in the Fifth Circuit.
FinCEN has provided guidance that reporting companies will not be subject to fines if they do not comply with the CTA while the injunction is in place. However, FinCEN continues to accept beneficial ownership reports on a voluntary basis, so any company concerned with being able to complete its compliance obligations in a potentially short timeframe has the option to report to FinCEN while the injunction remains in place. Because it is possible that the Supreme Court may lift the injunction, companies that would be subject to CTA reporting, particularly those with complex or substantial reporting obligations, should be ready to file should the injunction be lifted.
We are continuing to closely monitor developments in other pending cases challenging the CTA and will provide updates regarding any changes in the CTA’s status.
Please contact the Honigman Corporate Transparency Act Task Force or your regular firm attorney with questions regarding your company’s filing considerations.
Angela Gamalski Brandy Bruyere