CTA Update: FinCEN’s Response to Preliminary Injunction
FinCEN has issued an alert acknowledging the nationwide injunction halting the enforcement of the Corporate Transparency Act (the “CTA”). FinCEN stated that they will “comply with the order … for as long as it remains in effect” and that reporting companies “are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect.” Since the federal court’s decision “stays all deadlines to comply with the CTA’s reporting requirements[,]” reporting companies created pre-and-post-January 1, 2024 previously required to file, will not be subject to liability if they fail to file while the order remains in force.
FinCEN stated that they had filed a notice of appeal to the Texas Top Cop Shop decision on December 5, 2024. The FinCEN Alert also noted that other federal courts, particularly the U.S. District Courts in Virginia and Oregon, held that the CTA is constitutional. While FinCEN has not issued any guidance on an extended timeline for filing given the Texas Top Cop Shop injunction, FinCEN noted that “reporting companies may continue to voluntarily submit beneficial ownership information reports.” We continue to recommend that companies prepare to file their beneficial ownership information reports in order to comply with the CTA and consult with their counsel on whether it is appropriate to file before the existing December 31, 2024 filing deadline for pre-2024 entities, or more immediate deadlines for more recently formed entities.
For more information on the Corporate Transparency Act, please click here.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
Join Our Mailing List
Stay up to date with the latest insights, events, and more
