Corporate Transparency Act Updates - January 2025

Under the Corporate Transparency Act (CTA), companies subject to the beneficial ownership information (BOI) reporting requirement are not obligated to file reports while an injunction remains in effect, as stated by the Financial Crimes Enforcement Network (FinCEN). These companies will not face penalties for failing to submit reports during this period. However, approximately 32 million small businesses covered by the reporting requirement may still voluntarily submit their BOI reports. Although the U.S. Supreme Court recently stayed part of a nationwide injunction issued in the case Top Cop Shop, Inc. v. Garland, a separate nationwide injunction from another Texas court remains in place. The Texas Public Policy Foundation, representing the plaintiffs in the second case, emphasized that their legal arguments differ from those considered by the Supreme Court.

Based on this information, if your company is subject to the Corporate Transparency Act's reporting requirements, here’s what you should consider:

No Immediate Action Required: You don’t need to file your beneficial ownership information (BOI) report while the injunction is in place, so there's no urgency to submit the report for now. However, please continue to compile the information needed so that you can quickly act in the event you need to comply with the BOI filing requirements on short notice.

1. Stay Informed: Keep an eye on developments, as the legal situation could change. A ruling or change in the injunction could require action in the near future.

2. Voluntary Filing: If you choose to do so, you may submit the BOI report voluntarily. This could help your company stay ahead of compliance, but it’s not mandatory at the moment.

3. Monitor Legal Updates: Given that the legal cases behind these injunctions are ongoing, it’s important to stay updated on any court decisions or changes to the injunction that might affect your reporting obligations.

It’s a good idea to consult with legal counsel or compliance experts if you’re unsure about whether to take any specific steps during this period.