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We are writing to inform you yet again, on developments in the on-going litigation matters surrounding the Corporate Transparency Act (“CTA”) and its provisions mandating that certain entities disclose information concerning their beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

On December 31, 2024, in Texas Top Cop Shop, Inc. v. McHenry (formerly v. Garland), the Department of Justice submitted an application to the Supreme Court to halt the injunction and narrow its scope. On Thursday, January 23, 2025, the U.S. Supreme Court weighed in on the issue and issued a brief, non-descript order, seeming to reinstate the law and the enforcement thereof while the underlying legal challenge to it continues to move forward. This order comes after a series of contradictory decisions issued by the Fifth Circuit Court of Appeals.

Despite the Supreme Court’s ruling, there exists a separate nationwide injunction issued by a different judge in Smith v. U.S. Department of Treasury. The Supreme Court’s decision does not affect this injunction, and as such reporting companies are not required to file beneficial ownership information with FinCEN. While the Smith injunction remains in place, there continues to be no liability in the event a reporting company fails to file its beneficial owners report. FinCEN in its splash page on its website acknowledges the continued block to implementation of the CTA, whilst still reminding all its visitors that voluntary compliance is still permitted.

As always, we will continue to closely monitor this legal matter and update you on any further developments. Should the situation change, we will provide guidance on next steps and assist you in ensuring compliance with any new requirements.

If you have any questions or need further clarification regarding how this ruling may affect your business, please do not hesitate to contact us at businessmatters@fletchertilton.com. If you are already in contact with someone at the firm concerning your requirements under the CTA, please direct any comments to your primary contact. We appreciate the privilege of providing legal services to our clients.