As you may know, we have posted numerous updates on the pending litigation surrounding the Federal Corporate Transparency Act (“CTA”) and enforcement of the CTA by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).
After considerable back and forth in the last several weeks on whether the CTA Beneficial Owner Information filing deadlines should be stayed pending a federal district court’s decision on the constitutionality of the CTA, the United States Supreme Court has decided to lift the federal district court’s nationwide preliminary injunction in Texas Top Cop Shop, Inc. et al. v. Merrick Garland, Attorney General of the United States, et al. (EDTX 4:24-cv-478). However, a separate division of the Eastern District of Texas granted another nationwide preliminary injunction in Samantha Smith et al. v. United States Department of the Treasury et al. (EDTX 6:24-cv-336).
The confusion continues. Given that the Supreme Court’s decision was issued in Texas Top Cop Shop on January 23rd, after the lower federal court’s January 7th decision in Smith, the Smith court may amend its order to conform with the Supreme Court’s decision in Texas Top Cop Shop.Additionally, with the new administration settling in, there is uncertainly whether the U.S. Attorney General’s Office will pursue defending the CTA any further.
As of January 24, 2025, FinCEN has issued an alert on its website stating that it will be accepting voluntary submissions while the nationwide preliminary injunction is in effect.
Ultimately, the constitutionality of the CTA will be decided. We will provide further updates on these cases when available.
These federal litigation cases do not affect any similar state corporate transparency laws. New York’s LLC Transparency Act (the “NY Act”) requires the disclosure of beneficial ownership information to the New York Department of State by limited liability companies formed under the laws of the state of New York and foreign limited liability companies authorized to do business in the state of New York. The NY Act is largely based on the CTA and currently is set to go into effect on January 1, 2026.
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For further information or guidance on revising your policies, procedures, and corporate governance agreements, please contact David Paseltiner or Rose Egan. You can follow our blog for more information as it becomes available.