On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide order prohibiting the Treasury Department/Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA).
This is, however, only a preliminary injunction and not a final decision – and FinCEN has indicated it would appeal this decision. It is possible that this decision is overturned (temporarily or permanently) and a final decision may not come until after the January 1, 2025 CTA compliance deadline for entities formed prior to January 1, 2024.
In light of the previously applicable January 1, 2025 deadline, combined with the holidays, we recommend that companies finalize their analysis to determine whether or not they meet an exemption to file, identify their beneficial owners, gather all necessary identification documents and stand ready to file – in the event that this decision is overturned before January 1, 2025.
Please note that FinCEN is still accepting filings pursuant to CTA. Reporting companies may consider defensively filing the Beneficial Ownership Information Report. Such filing would be at the discretion of the reporting company and not a legal requirement so long as CTA remains enjoined.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
