At A Glance
The US Supreme Court has stayed the injunction against the Corporate Transparency Act (CTA), but the requirement for companies to file beneficial ownership information remains suspended, creating ongoing uncertainty about compliance timelines. This Legal Update summarizes status and notes potential developments that could impact companies' reporting obligations.
On January 23, 2025, the US Supreme Court stayed the nationwide preliminary injunction suspending enforcement of the Corporate Transparency Act (CTA) and its implementing regulations (the "Reporting Rule") pending resolution of the appeal of that injunction in the US Court of Appeals for the Fifth Circuit.
However, companies' obligations to file beneficial ownership information with the US Financial Crimes Enforcement Network (FinCEN) under the Reporting Rule remain suspended.
While the Court's order stays the injunction that had been in place since early December (except for a series of back-and-forth rulings that had briefly stayed and then reinstated the injunction), the Court's order does not address the separate stay of the effective date of the Reporting Rule ordered by a different district judge in the US District Court for the Eastern District of Texas on January 7, 2025. Thus, notwithstanding the Supreme Court's order, the obligation to file beneficial ownership information remains suspended.
FinCEN Confirms Suspension
On January 24, 2025, FinCEN released a statement on its website confirming that "reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court's action" in the original Texas litigation and that reporting companies are not subject to liability if they fail to file beneficial ownership information while the remaining order is in force. FinCEN will continue to accept beneficial ownership reports on a voluntary basis.
What Might Happen Next
While the Supreme Court's order removes one of the remaining hurdles to the Reporting Rule becoming effective, it is not clear when, or if, the beneficial ownership information filing requirements will actually take effect. Unlike the original injunction, the district court issuing the January 7 order enjoined enforcement of the CTA only against the parties in the case; however, the court stayed the effective date of the Reporting Rule universally (nationwide) under Section 705 of the Administrative Procedure Act. Although the court in the original Texas litigation had taken the same step in its now-stayed order, the nature of the relief in the January 7 order is potentially different enough that it remains to be seen whether the district court, Fifth Circuit, or potentially the Supreme Court would distinguish the two orders and leave the stay of the Reporting Rule's effective date in place.
Until this remaining hurdle is cleared, the Reporting Rule remains suspended. FinCEN may seek further action from the district court or Fifth Circuit to lift the stay of the effective date in light of the Supreme Court's order in the original Texas litigation. If that stay is lifted, FinCEN would likely, as it did in connection with the original injunction, establish a new compliance timeline for companies that had not yet filed beneficial ownership reports—a timeline which itself may be informed by the Trump Administration's broader efforts to postpone the effective dates of pending rules pending further review.
Takeaways for Companies
For now, companies that may be subject to the Reporting Rule and that have not yet filed beneficial ownership reports continue to have relief from those requirements. Companies should continue to closely monitor the ongoing litigation and statements from FinCEN in case there are further developments. Companies should also continue to evaluate whether filings may be required (or whether an exemption applies) and should consider proactively monitoring beneficial ownership and collecting information so as to be able to make filings within any new compliance timeline that may be imposed by FinCEN if the stay is lifted.
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