
The Corporate Transparency Act (CTA) has had a tumultuous last two months. After a December full of will-they-or-won't-they moments regarding whether the CTA would go into effect, January sees it going into effect … kind of.
The Supreme Court has finally weighed in on the nationwide injunction at the center of Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland. The order, issued by Justice Alito, did not provide any justification for granting the requested stay of the injunction. Justice Gorsuch issued a concurring opinion stating that he would "go a step further and, as the government suggests, take this case now to resolve definitively the question whether a district court may issue universal injunctive relief." Meanwhile, Justice Jackson issued a dissenting opinion stating that the "Government has provided no indication that injury of a more serious or significant nature would result if the Act’s implementation is further delayed while the litigation proceeds in the lower courts."
Despite the decision, beneficial ownership information (BOI) reporting is still on hold. A second case involving the Texas Public Policy Foundation (TPPF), which represented the plaintiffs in Samantha Smith and Robert Means vs. U.S. Department of Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/2025), said in a news release Thursday that its case is not affected by the one in which the Supreme Court issued a stay.
The Financial Criminal Enforcement Network (FinCEN) issued guidance stating:
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, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). 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.
It remains unclear how the saga of the CTA will resolve. Given FinCEN's continued assertion that the CTA is constitutional, and the Government's success in numerous other cases concerning the CTA, we recommend that reporting companies consider filing voluntarily to avoid being caught off-guard with a short deadline to file and to any potential liability. At the very least, gather the information necessary for filing so that you can file if … when … the injunction is lifted. This issue is a fast-moving target, and no one knows what they outcome will be. So be prepared.
Setliff Law is prepared to help your business file and stay up to date on any changes regarding the CTA. If you are interested in voluntarily filing, or would like to know how the CTA may impact you, please feel free to contact Sean Barrick (sbarrick@setlifflaw.com) at (804) 377-1276 or Mitchell Goldstein (mgoldstein@setlifflaw.com) at (804) 377-1269 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.
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